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BBC News — UK's credit rating downgraded by Moody's

Moody's, one of the major ratings agencies, downgraded the UK to an Aa2 rating from Aa1.

It said leaving the European Union was creating economic uncertainty at a time when the UK's debt reduction plans were already off course.

Downing Street said the firm's Brexit assessments were "outdated".

The other major agencies, Fitch and S&P, changed their ratings in 2016, with S&P cutting it two notches from AAA to AA, and Fitch lowering it from AA+ to AA.

Moody's said the government had "yielded to pressure and raised spending in several areas" including health and social care.

It says revenues were unlikely to compensate for the higher spending....

If anyone is outdated it is the credit rating agencies. The US has been a currency sovereign since the demise of the gold standard and floating rates.

Morons. Can't tell the difference between a sovereign currency issuer and currency users.

Credit rating agencies, in essence, rate a country on the strength of its economy - scoring governments or large companies on how likely they are to pay back their debt.

A currency sovereign can always meet its obligations in the currency it issue fully and on time. Default or delay is a voluntary decision taken politically rather than the result of financial constraint.

What is wrong with these people?

BBC News
UK's credit rating downgraded by Moody's

Standard & Poor's has its head up its ass yet again!

The idiots at S&P are at it again, downgrading China's "debt." This asinine rating agency does not understand the distinction between a currency issuing nation (of which, China is one) and a country that doesn't issue currency or, that has debt denominated in another currency.

All of China's "debt" is denominated in yuan, which they have the monopoly power to issue. There is zero risk that China wouldn't be able to meet its obligations in yuan.

Anyway, what do you expect from a firm that rated all of the junk debt that caused the housing crisis AAA?

By the way, S&P is not alone. Moody's and Fitch are also just as bad. All three have their heads up their asses.

Stocks in new record territory as I predicted all along. MMT Trader had the numbers saying that it would.

Stocks in new record high territory as I said would happen. Every downdraft, when the voices of recession, crash, disaster were everywhere, I was saying that fiscal flows were exceptionally strong and that you had to buy into weakness and stocks were going higher. The economy will beat growth expectations, too.

There are more gains to come. This is just the beginning.

MMT Trader.

There they go again. Jerks at S&P and Fitch downgrade Britain's credit rating.

Haven't we seen this movie before?

Remember when the idiots at S&P downgraded the U.S. credit rating in 2011? I was on TV that morning and was pounding the table telling people to buy Treasuries.

Now you have the same idiot, S&P, plus a new idiot, Fitch, downgrading Britain's credit rating because of Brexit.

Hey you morons at the credit rating agencies...a sovereign nation that spends in its own currency and where all its obligations are denominated in that currency cannot become insolvent. There can never be an inability to pay its debts.

What idiots.

Buy gilts.

MMT Trader scored me some big profits today!

Long stocks and the S&P E-mini contract. Took out 60 ticks or, $3000 on that trade.

Short 10-year note futures. Took 21 ticks or, $656.25 on that trade.

Most analysts and pundits have been either out of hte stock market or short. I analyze the fiscal flows. (Top line government spending flows.)

That is what has kept me on the right side of the market this whole entire time.

Other positions
Bought Apple, Inc @ 90.67.
Made 187 pips in USDJPY
Made 140 pips in GBPUSD

Plus many more.

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Here's a nice graph showing what QE actually did

An post unrelated to QE at Advisor Perpsectives included this nice graph:

This image clearly demonstrates what we have previously discussed here at MNE- that despite the common predictions, the Fed's Quantitative Easing programs actually brought 10yr bond yields up, not down! The story goes something like this: 

So the Fed announces each round of QE and stokes off inflation fears, causing prices to go down. Then, when the boys over at the NY Fed SOMA desk actually begin buying, they put in bids near this newer, lower price, and actually end up locking in these lower prices. Further, the quantity of their purchases during each QE isnt actually enough to affect prices substantially. Then when QE ends, inflation fears go away, and bonds rally. Prices go up to where they were before each QE announcement, and the Fed can book gains (ie, losses to the private sector) if they ever have to sell. Somehow, this is perceived as "getting the best deal for the taxpayers", as if taxes have anything to do with this process.

Takeaways here are:

1)The quantity of the Fed’s Tsy purchases are actually too small to bring prices up

2) But they are large enough to scare other bondholers into selling...(more are net sold than bought?), so prices actually go down

3) QE ends, then inflation fears subside and people go back into bonds, (the risk-off trade), bringing prices back up

4) and the Fed is bidding too low anyway, because they are afriad of taking too large a loss if prices go down more, even though this would not matter at any fundamental level. The fed is monopoly issuer of reserves, so it doesnt matter if they take big losses, since they are self funding. This may hurt the amount they can put towards operating costs, and reduce their contribution to “deficit reduction” which they may like doing, due to the politics.

It's Official: Standard & Poors Downgrades Fiat

   (Commentary posted by Roger Erickson)



The European Union was stripped of its AAA credit rating by the Standard & Poor’s agency on Friday [Dec 20] as the 28-state block struggles to deal with the debt problems afflicting a number of its members and internal conflict over its budget.

Maybe some of them still think Fiat is a car?

Or are they actually downgrading public initiative? If so, how can one pretend to apply a long-term metric to something that's as fickle as mood, propaganda or the act of recognizing context?

Hopefully S&P's New Years resolution is to recognize common sense, forgo innocent fraud, and seek situational awareness?