- Remember that S&P was rating bonds based on subprime mortgages AAA in 2008.
- The US Treasury found a $2 trillion error in S&P's initial calculations Friday afternoon before the downgrading was announced. This raises serious questions about whether the downgrade was based on technical analysis of default probabilities or was made for other reasons.
- As the stock market slides for another day, it seems investors cannot get enough US Treasury bonds (yield for two year bonds is now down to 0.2%). The downgrade sure has not scared them.
- No other country is listed at AA+. AAA countries now include Australia, Austria, Canada, Denmark, Finland, France, Germany, Guernsey (I did not know these islands in the British channel were a country), Hong Kong, Liechtenstein, Luxembourg, Netherlands, New Zealand, Norway, Singapore, Sweden, Switzerland and the United Kingdom. Spain, which is a genuine risk for sovereign debt default, is AA.
What's going on with inflation?
2 years ago
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