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Frequent Contributor

Ouch: United States Outlook Revised to Negative From Stable by Fitch

There you have it. It is ok to have this outlook temporarily to save the country from bankruptcy. How many of its employees are still working?

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Re: Ouch: United States Outlook Revised to Negative From Stable by Fitch

So if an insurance company holds so-called "risk free" Treasuries, its ratings pay the price for events totally out of its control.

Why have ratings if the model is kaput?

Bob

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Re: Ouch: United States Outlook Revised to Negative From Stable by Fitch


@GLI2019 wrote:"risk free" Treasuries,

Bob


See now, you know that Treasuries are also risky. If so, why cannot we invest in private companies who pay a lot more than what treasuries pay?

Stocks post fourth straight monthly gain as tech shares surge.

I got paid today and will get paid Monday also around 1% of certain investments for this month. There is no such negative outlook for me.

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Re: Ouch: United States Outlook Revised to Negative From Stable by Fitch


@ECEPROF wrote:

There you have it. It is ok to have this outlook temporarily to save the country from bankruptcy.


If you believe the US is going to go bankrupt, then sell Treasuries short.

People hardly ever put their money where there mouth is.

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Re: Ouch: United States Outlook Revised to Negative From Stable by Fitch

I do not own any US treasuries knowingly. So, there is nothing to pull out. My recommendation is not to invest in the US bonds which pay "pittnace." Read my other posts - a lot of them - in other forums on this issue.

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Re: Ouch: United States Outlook Revised to Negative From Stable by Fitch

@ECEPROF I said sell short

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Re: Ouch: United States Outlook Revised to Negative From Stable by Fitch

up-down.jpg

So... Red = economy  Green = stock market  How much longer can this go on?   Answer: as long as money is dropping from helicopters, spraying from fire hydrants???  yes, no, maybe?

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Re: Ouch: United States Outlook Revised to Negative From Stable by Fitch


@royal4 wrote:

up-down.jpg

So... Red = economy  Green = stock market  How much longer can this go on?   Answer: as long as money is dropping from helicopters, spraying from fire hydrants???  yes, no, maybe?


I do not know how you come up with hilarious items everyday to keep me happy. Anyway, thanks.

Chang:

I do not know what is meant by "sell Short." I only use cash investments  - just normal buy and sell. I bought some QQQ, VGT, and GLAD yesterday and today using cash. I am not sure what I will do  with some cash on Monday. I can also use this cash to pay some loans. We will see.

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Re: Ouch: United States Outlook Revised to Negative From Stable by Fitch

@ECEPROF I suggest you look up what short selling is. Even if you don’t do it yourself (and very few people do) it is an important concept if you want to read and understand the financial media. Essentially, short selling a stock (which you don’t own) is betting on the stock declining. Like an inverse fund. If the stock price declines, you make money; if it rises, you lose money. The mechanics involve borrowing someone else’s shares to sell at a certain cost ... I’m sure Investopedia has a good write up.

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Re: Ouch: United States Outlook Revised to Negative From Stable by Fitch

Nat,

I put "risk free" in quotation marks for a reason.

Back in the Great Recession TIAA was downgraded by S & P because it held Treasuries.

Bob

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Re: Ouch: United States Outlook Revised to Negative From Stable by Fitch


@GLI2019 wrote:

Nat,

I put "risk free" in quotation marks for a reason.

Back in the Great Recession TIAA was downgraded by S & P because it held Treasuries.

Bob


Thanks Bob. I did not know it. I never worried about it then. Since I was an early retiree, I was just figuring out how to make things work because of variuos things that happened. I could not manage because we had spent a lot of money on my son's marriage. Finaly, I had to pull out some cash from my ROTH (TIAA at that time) to pay some bills. It was a rough time for us.

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Re: Ouch: United States Outlook Revised to Negative From Stable by Fitch


@ECEPROF wrote:

There you have it. It is ok to have this outlook temporarily to save the country from bankruptcy. How many of its employees are still working?


What is the absence of a credible consolidation plan and why should rating agencies care about the $3T+ increase in debt Since the federal reserve bank will buy all of it at an interest rate of 1,3% and return 80% of interest it receives to the treasury? MMT has eliminated the need for rating agencies to rate federal debt because the federal reserve will buy all US debt at an low interest rate Regardless of the amount  borrowed. 

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Re: Ouch: United States Outlook Revised to Negative From Stable by Fitch

Answer is:  it wont matter.  Headline reads:   Profligate spending by elected officials to continue unabated, unfazed by continued credit deterioration.

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Re: Ouch: United States Outlook Revised to Negative From Stable by Fitch

Do you believe the market does not understand this?


@royal4 wrote:

up-down.jpg

So... Red = economy  Green = stock market  How much longer can this go on?   Answer: as long as money is dropping from helicopters, spraying from fire hydrants???  yes, no, maybe?


 

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Re: Ouch: United States Outlook Revised to Negative From Stable by Fitch


@GLI2019 wrote:

Nat,

I put "risk free" in quotation marks for a reason.

Back in the Great Recession TIAA was downgraded by S & P because it held Treasuries.

Bob


Actually, all financials were downgraded then on the theory they couldn't have ratings better than the US. So, only 2-3 AAA companies remained [now only JNJ, MSFT].

If not for that, several financials would still be AAA.

YBB
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Re: Ouch: United States Outlook Revised to Negative From Stable by Fitch

So buying QQQ at all time high in a terrible economy, which pays no div, is not considered risky? I don't think many buy treasuries for yield. I think there is risk in everything.

Just looked at GLAD. It crashed in 2008 and 2020 and never recovered. Interesting. I wonder how they are so smart to produce 10% yield?


@ECEPROF wrote:

@royal4 wrote:

up-down.jpg

So... Red = economy  Green = stock market  How much longer can this go on?   Answer: as long as money is dropping from helicopters, spraying from fire hydrants???  yes, no, maybe?


I do not know how you come up with hilarious items everyday to keep me happy. Anyway, thanks.

Chang:

I do not know what is meant by "sell Short." I only use cash investments  - just normal buy and sell. I bought some QQQ, VGT, and GLAD yesterday and today using cash. I am not sure what I will do  with some cash on Monday. I can also use this cash to pay some loans. We will see.


 

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Re: Ouch: United States Outlook Revised to Negative From Stable by Fitch

I understand (and remember), Yogi, but in the context of my comments I focused solely on TIAA.

Bob

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Re: Ouch: United States Outlook Revised to Negative From Stable by Fitch


@GLI2019 wrote:

Nat,

I put "risk free" in quotation marks for a reason.

Back in the Great Recession TIAA was downgraded by S & P because it held Treasuries.

Bob


Not exactly

TIAA almost became Insolvent during the depression because it was guaranteeing 4% interest on its annuity contracts but was earning only 3% on its investments. Carnegie Foundation made a grant to TIAA to keep it solvent and TIAA lowered guaranteed interest rate on new contracts to 3%. 

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Re: Ouch: United States Outlook Revised to Negative From Stable by Fitch


@Gary1952 wrote:

So buying QQQ at all time high in a terrible economy, which pays no div, is not considered risky? I don't think many buy treasuries for yield. I think there is risk in everything.

Just looked at GLAD. It crashed in 2008 and 2020 and never recovered. Interesting. I wonder how they are so smart to produce 10% yield?


@ECEPROF wrote:

@royal4 wrote:

up-down.jpg

So... Red = economy  Green = stock market  How much longer can this go on?   Answer: as long as money is dropping from helicopters, spraying from fire hydrants???  yes, no, maybe?


I do not know how you come up with hilarious items everyday to keep me happy. Anyway, thanks.

Chang:

I do not know what is meant by "sell Short." I only use cash investments  - just normal buy and sell. I bought some QQQ, VGT, and GLAD yesterday and today using cash. I am not sure what I will do  with some cash on Monday. I can also use this cash to pay some loans. We will see.


 


10 yr Total return for QQQ is 20.46% . Not too shabby.

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Re: Ouch: United States Outlook Revised to Negative From Stable by Fitch


@chang wrote:

@ECEPROF wrote:

There you have it. It is ok to have this outlook temporarily to save the country from bankruptcy.


If you believe the US is going to go bankrupt, then sell Treasuries short.

People hardly ever put their money where there mouth is.


How can treasury become bankrupt when Federal reserve will Loan an unlimited amount of money to the treasury at a rate of 1.3% and return 80% of the interest it collects each year to the treasury?

Is this a great country or what?

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