Wednesday, June 29, 2011

S&P to Deeply Cut US Ratings if Debt Payment Missed

The United States would immediately have its top-notch credit rating slashed to "selective default" if it misses a debt payment on August 4, Standard & Poor's managing director John Chambers told Reuters.

Chambers, who is also the chairman of S&P's sovereign ratings committee, told Reuters on Tuesday that U.S. Treasury bills maturing on Aug. 4 would be rated 'D' if the government fails to honor them. Unaffected Treasuries would be downgraded as well, but not as sharply, he said.

"If the U.S. government misses a payment, it goes to D," Chambers said. "That would happen right after August 4, when the bills mature, because they don't have a grace period."

Fears of a technical default have been rising after budget negotiations between Democrats and Republicans fell apart in Washington earlier this week.
Read the rest here.

1 comment:

Cayo Joe said...

There is absolutely NO reason why the U.S. should miss any payment on any debt. There are many hundreds of billions in tax receipts coming into the Fed every year. If the Obama admin decides to summarily skip a payment on sovereign debt it will be for political reasons... and ought to bring immediate impeachment proceedings.