Tag Archives: Credit rating

What political games is S&P trying to play?

Silvio Berlusconi in a meeting
Image via Wikipedia

First, it was the overtly political game which S&P tried to play with the United States, and now Italy?

Standard and Poor’s rocked the euro and bond markets on Tuesday with a one-notch cut in Italy’s credit rating that added fuel to opposition calls for Prime Minister Silvio Berlusconi to resign and increased pressure on the debt-stressed euro zone.

S&P’s cut its ratings on the euro zone’s third largest economy to A/A-1 from A+/A-1+, judging it less creditworthy than Slovakia, and kept its outlook on negative, warning of a deteriorating growth outlook and damaging political uncertainty.

The euro fell more than half a cent against the dollar before picking up following some reassuring signs from Greece, but bond yields hovered within sight of levels which prompted the European Central Bank to step into the market and buy Italian bonds. (here)

Will this kill the Euro, and hurt the American economy which has now become much more invested in European banks thanks to loosening of the short-tern lending rules? What happens if the Euro fails? (More than likely, a lot of good things for the American dollar)

But, beyond that, is anyone else worried that S&P is playing politics?

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China just showed why Romans 13.8 is important

China, the biggest American foreign creditor with more than $1 trillion in Treasury debt as of March, called on the U.S. government Thursday to adopt “responsible policies” to protect investor interests.

The Foreign Ministry comments followed a warning by Moody’s Investors Service that it might strip the United States of its gold-plated credit rating in coming weeks if the $14.3 trillion limit on America’s borrowing was not raised.

China urges US to be ‘responsible’ on debts – politics – Capitol Hill – msnbc.com.

Owe nothing to anyone– except for your obligation to love one another. If you love your neighbor, you will fulfill the requirements of God’s law. (Rom 13:8 NLT)

Should be fun, don’t you think?

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