one of those

[solarbird]

This is one of the less worrysome rumours, that now has a good source:

S&P's Chambers: Pressure building on AAA rating
Wed Sep 17, 2008 12:19pm EDT
Reuters
By Walden Siew

NEW YORK (Reuters) - Pressure is building on the pristine "AAA" rating of the United States after a federal bailout of American International Group Inc, Standard & Poor's sovereign ratings committee chairman said on Wednesday.

The $85 billion bailout of AIG on Tuesday by the U.S. Federal Reserve "has weakened the fiscal profile of the United States," S&P's John Chambers told Reuters in an interview.

"Lack of a pro-active stance could have resulted in further financial stress and put pressure on the U.S. triple-A rating," Chambers said. "There's no God-given gift of a AAA rating, and the U.S. has to earn it like everyone else."

If treasuries lose AAA, the entire game is over. Meanwhile, here's more on how the Fed is running out of money, and raising more through emergency auctions. The last few months, those have mostly - overwhelmingly - been sales to sovereign wealth funds and similar foreign-governmental interests. Is this a good idea, and is it a stable situation?

also: TED to 304. Not tasty.

Comments

[oh6.livejournal.com]

I seem to recall that the province of Ontario's credit rating dropped to AA some time, maybe in the '90s, since that's when the national debt-to-GDP ratio was highest. It was a non-event, but then, the US is about 60 times bigger.

[solarbird]

Sure. And states have had similar things happen. But the US dollar is the global "reserve currency," and, more importantly, the US is as massive debtor relying entirely at this point on foreign governments to float its increasing debt.