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US Debt downgraded again; from AA+ to AA-

September 17, 2012

It’s not by one of the agencies that I’m most familiar with, but after looking at their funding model, I’m not surprised.

Some interesting quotes from the article:

‘  “From 2006 to present,” the ratings agency said in a note, “the US’s debt to GDP rose from 66% to 104% and will probably rise to 110% a year from today under current circumstances; the annual budget deficit is 8%.”

“In comparison, Spain has a debt to GDP of 68.5% and an annual budget deficit of 8.5%.”  ‘

This quote discusses their funding model.

“Unlike its larger peers in the credit-rating business, which are compensated by Wall Street companies that issue securities, Egan-Jones is paid by investors. The firm touts this investor-supported structure as a means of avoiding conflicts of interest, which plagued the industry in the run-up to the 2008 financial crisis, when highly dubious securities being peddled by investment banks were often granted triple-A status.”

This is an article that discusses the last downgrade from AAA to AA+ from last year.

I’m still always surprised that our nation has a rating this good.  It’s fairly disturbing.

Looks like Moody’s is planning the same thing.

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