Tuesday, April 27, 2010

Why World Finance is Messed up....

Greece and Portugal were downgraded today by rating agencies. Greece and Portugal have been staring at the same problems for a good long while now. The idea that they were cut 3 notches in ratings in one swoop (Greece) now and not say one notch a few months back is a joke. This is not as bad as the AAA rated (that is very good) subprime mortgage securities dropping to junk in one day, but it is bad. The rating agencies should be more proactive. Until the rating agencies improve, fixed income investing will be jittery. I bet Moody's would not downgrade the USA unless Armageddon started. Even then the US might just be put on 'negative watch'.

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