Half a world away from the USA, China's Dagong credit rating agency can afford to be blunter than Standard & Poor.
Their view, shared by many in the West, is that the problems have not been solved but damagingly deferred; $4 trillion needs to be cut from the public budget within 5 years; QE3 is inevitable and "will throw the world economy into an overall crisis". Accordingly, on August 3 Dagong downgraded the US rating further, to "A, with a negative outlook".
If the Western rating agencies dare to echo that view (and some see last week's S&P's re-rating to AA+ as an attempt to break the news gently), it could be the trigger for a more serious selloff in the stock and bond markets. Disaster for many, opportunity for some - perhaps.
INVESTMENT DISCLOSURE: None. Still in cash (and index-linked National Savings Certificates), and missing all those day-trading opportunities.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
No comments:
Post a Comment
Unfortunately, because of a plague of spam comments, you need to be a "registered user", otherwise your observations will be buried in a torrent of multilingual nonsense. Please do comment!
Say what you please, so long as it's phrased politely and is not libellous or legally proscribed. Fact, reason and wit are keenly welcomed.