"Pursuant to our criteria, the fiscal autonomy, political independence, and generally strong credit cultures of U.S. states and local governments can support ratings above that of the U.S. sovereign,"
Now from a practical perspective I am happy to hear that as I advise some very well run state and local governments who are undoubtedly among those to keep the AAA.
Nonetheless, how does this make any sense? If the US defaults then do we really think all is well in Charlotte, NC. Somehow I am guessing not.
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Tuesday ~ August 9th, 2011 at 2:03 pm
IVV
So what’s really going on is S&P is calling Congress a bunch of poopy pants.
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Yeah, the markets will be fine soon. Carry on.
Tuesday ~ August 9th, 2011 at 2:06 pm
IVV
Well, okay, maybe not fine… but it won’t be because of S&P.
Wednesday ~ August 10th, 2011 at 6:37 am
banjosupreme
Well, the US did come pretty close to defaulting last week. I’m sure that at least some municipalities would have been able to continue making their own debt payments in what I imagine would have been a relatively short period before everyone in DC got their act together.
Wednesday ~ August 10th, 2011 at 6:01 pm
matt
Banjo is right. You’re assuming that defaults are driven by *economics* when our recent experience shows that *politics* can achieve the same result. It’s entirely plausible that the political leadership of Charlotte is more responsible than that of Washington DC.
Wednesday ~ August 10th, 2011 at 11:31 pm
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Tuesday ~ August 16th, 2011 at 9:35 am
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