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The co-chief investment officer of the world’s largest bond fund said the US will eventually lose its top AAA credit rating the same day that Standard and Poor’s rating service downgraded Britain’s national debt from stable to negative.
The US will likely be downgraded in “at least three to four years, if that, but the market will recognize the problems before the rating services - just like it did today,” said Bill Gross of Pacific Investment Management Co.
Originally posted by Walkswithfish
You should read up on the AAA rating and its role in the great depression.
This could a good indicator of worse things to come.
Originally posted by thecrow001
Whats a AAA rating ? What does this rating thing mean ?
In investment, the bond credit rating assesses the credit worthiness of a corporation's debt issues. It is analogous to credit ratings for individuals and countries. The credit rating is a financial indicator to potential investors of debt securities such as bonds. These are assigned by credit rating agencies such as Moody's, Standard & Poor's, and Fitch have letter designations such as AAA, B, CC.
Country Risk Criteria
A.M. Best defines country risk (read the methodology) as the risk that country-specific factors could adversely affect an insurer's ability to meet its financial obligations. Country risk is evaluated and factored into all A.M. Best ratings. As part of evaluating country risk, A.M. Best identifies the various factors within a country that may directly or indirectly affect an insurance company.
Countries are placed into one of five tiers, ranging from Country Risk Tier 1 (CRT-1), denoting a stable environment with the least amount of risk, to Country Risk Tier 5 (CRT-5) for countries that pose the most risk and, therefore, the greatest challenge to an insurer's financial stability, strength and performance.