Moody's warns 15 states of credit downgrades

[BostonPirate]

Credit analyst Moody’s warned that five states are in danger of losing their top-rated AAA credit ratings, just a week after both Moody’s and Standard and Poor’s issued a similar warning to the feds.

Maryland, New Mexico, Virginia, Tennessee and South Carolina face downgrades because of their heavy reliance on federal revenue, the ratings agency said.

“Should the U.S. government’s rating be downgraded to Aa1 or lower, these five states’ ratings would likely be downgraded as well,” Moody’s announced Tuesday.

“I’m very unhappy. In fact, we’re furious,” said Virginia Governor Bob McDonnell during a Tuesday news conference in Richmond, Va. A spokeswoman for Maryland Governor Martin O’Malley was more measured, telling the Washington Post that “Moody’s hasn’t done anything yet. It’s not surprising they would reevaluate considering we have a large number of federal employees and federal contractors. “

http://www.politico.com/news/stories/0711/59439.html#ixzz1SfQ45HCb

OOOOH says the Governor.... you mean you are going to do it state by state as well?

THATS not fair....lol

what an ass.

The other ten that have been warned that they are next in line to be evaluated after these five are : Alaska, Delaware, Georgia, Indiana, Iowa, Missouri, North Carolina, Texas, Utah and Vermont.

Alaska, Delaware, Georgia, Indiana, Iowa, Missouri, North Carolina, Texas, Utah and Vermont.

Let take a look at the leadership of these states shall we?

Vermont Democratic

North Carolina Democratic

Missouri Democratic

Delaware Democratic

Maryland Democratic

and......



New Mexico Republican

Virginia Republican

Tennessee Republican

South Carolina Republican

Alaska Republican

Georgia Republican

Indiana Republican

Iowa Republican

Texas Republican

Utah Republican

twice as many states with republican governors are now facing a credit rating reduction.

For those of you living in those states, you should expect life to change for you in the following ways....

Bonds will cost more for the nation to purchase, which will affect the overall credit availability for the average consumer, and when available it will be more expensive. Think of cars, homes, and other durable goods.. those will cost you more, and have lower quality as regulatory agencies go unfunded, and will further move the middle class out of property ownership. This affects the cost of apartments. So the cost of buying a house and car will go up, and so will your rent, if you are a renter, all as the quality of what you can afford decreases.

The Stock market will lose a huge vollume of its value, as foreign investors take their money out of the US economy... that means say goodbye to about half your 401K if you have it, and if you work for a publicly traded company, expect that a downsizing effort will begin that will probably result in closings of support offices and a reduced job force. They will fire a LOT of people.

That means a jump in teh unemployment in your area about three to five percent.

The Debt would immediately rise in the degree of billions of dollars as the new bonds are bought at greater cost, and the old bonds are traded in to pay for Soc Security, so social services and regulatory agencies will cut back. That means less unemployment insurance, medicaid, food scares and recalls due to the inability to inspect the food... look for everything to cost more, and be less available. what will be available will cost more.

Gas will jump at least 50 cents a gallon



Not to worry...

those that have billions banked will do fine, so according to the GOP, they will be hiring you more.

YEAH RIGHT.

 

[Kulindahr]

And I got an email today lamenting how Obama is the one responsible for not raising the debt ceiling, because he's unwilling to sacrifice Planned Parenthood....

 

[rareboy]

Oh you naughty states about to get penalized because your economy is going to go into the shitter if the number of federal employees is reduced.

But the Republican states should be fine. Because their governors know that it is private industry that provides the jobs, jobs, jobs.

 

[cynicus]

You can bet your ass that DeMint will be quite willing to take Federal money back to South Carolina. Georgia doesn't surprise me; our legislature is like a bunch of clowns in a car at the circus. They passed an immigration bill that is reported to have cost the south GA farmers $300 million in lost crops. They thought parolees and the unemployed were going to rush in and do all that stoop-labor when the Latinos left the state rather than face deportation. But like most of America, GA reacts rather than acts.

P.S. Once again, Boston Pirate, I must say I love you!

 

[BostonPirate]

thanks cynicus...

heres an update on this situation. It seems that the states are going on a bit of a borrowing spree while they still have the credit rating to do so.

http://money.cnn.com/2011/07/21/news/economy/Debt_ceiling_states/index.htm?cnn=yes&hpt=hp_t1

States around the nation are drawing up contingency plans in the event that federal policymakers don't resolve the debt ceiling impasse by Aug. 2. They are preparing for chaos in the municipal debt markets and delays in federal payments for Medicaid, education and other services, which could happen if the federal government defaults on its obligations

take a look at the article. It discusses the federal funds that would no longer be available, and how it will be affecting the average citizen of the states.

Make sure to send a thank you note to the speaker of the house, the tea party members, and the GOP.

No education funding, no public transportation, no medicaid, just to name a few.

 

[Kulindahr]

People don't really realize just how much federal money flows out in ways they've come to rely on. Universities get it directly, but also through students using federal loans to pay their tuition. Police departments get it, highway departments get it, and on and on.

 

[JayHawk]

And the leadership proves what? That either fucked up party can fuck things up? LOL priceless.

I didnt see Kansas on the list. Cool. I guess after Sebelius left Brownback hasn't had enough time to mess it up?

What is odd to me about that list is which huge unsustainable state is missing.... which one goes almost bankrupt every year?

One hint ..." I know a place where the grass is really greener; warm wet and wild, there must be something in the water......"

 

[BostonPirate]

The point is that the states that have the most to lose by a shutdown are those that are 2 to 1 in the same party thats causing the obstruction of legislation.

And WHO do you expect they will blame for their woes when the shit hits the fan?

Themselves or Obama?

 

[JayHawk]

Already been determined by polling that the R's are likely to receive the blame as most americans think the republicans are acting like spoiled children.

 

[BostonPirate]

The democratic PARTY is fighting to raise the debt ceiling so that the default cant happen.

as for kicking the can down the road, what the hell do you think not raising the debt ceiling is?

It doesn't change how much we owe. It just affects our ability to pay for it. NOT raising the ceiling is, litterally, kicking the can down the road.

You think the Dem govs aren't working like crazy to get the ceiling raised?

please

 

[JayHawk]

Well they will be raising the ceiling. Now we are just listening to the labor pains.

 

[Jack Springer]

Did anyone know the principle stockholder of Moody's is Warren Buffet ... just saying.

Seems extremely odd that California is not on the list -- or did I miss it.

 

[Jack Springer]

After doing some research, I'm not sure any of us understand the rating system for states.

Best to not comment if we are not fully informed.

 

[BostonPirate]

whats going to happen is that the cash that the Feds are borrowing at a lower rate will disapear, if the debt ceiling isn't raised, and the states with lowered credit scores will have to pay more interest for less money.

It will drive the state deficits out of control.

 

[Jack Springer]

whats going to happen is that the cash that the Feds are borrowing at a lower rate will disapear, if the debt ceiling isn't raised, and the states with lowered credit scores will have to pay more interest for less money.

It will drive the state deficits out of control.

But from what I've read - the states you listed as being "next" on the list are the highest states of all -- all worthy of no harm if US rating is lowered.

Just doesn't make any sense.

 

[White Eagle]

Austin American Statesman is the Newspaper in Austin. I would think they would have the latest. I searched the site and no response.

 

[BostonPirate]

five states have been put on warning, even IF the debt ceiling is raised due to budgetary issues.

the ten other states are the states that would be at risk if the federal funds were cut off.

Thats why they are buying up bonds now, and the bond market is active. The states are snapping up the cheap debt that the default may cause them to go into.

 

[JB3]

I'm surprised Illinois isn't on that list. We get a lot of federal money, AND we have the second worst debt situation in the nation.