News for hackers. Stuff that matters.

A comment on United States loses AAA credit rating from S&P . Parent comment

Re:United States loses AAA credit rating from S&P by _delirium on Friday August 05, 2011 @08:56PM (#2852467)
Does it? Many institutional investors don't treat U.S. Treasuries as ratable bonds, but a separate category (they aren't lumped in with AAA corporates in investment strategies, for the good reason that they have quite different characteristics).

Based on the slim case studies we have so far, the S&P downgrade of Japan in 2002 had approximately zero impact on Japanese bond rates. It doesn't even show up as a small blip on the 10-year graph; was just completely ignored.

[ Parent | on HN ]
Re:United States loses AAA credit rating from S&P by thematt on Friday August 05, 2011 @09:01PM (#2852483)
That's because Japanese debt (up to this point) has been primarily financed by its own citizens, life insurance and pension funds. These are more likely to accept sub-AAA rated bonds and support their own government than external investors are.
[ Parent | on HN ]
Re:United States loses AAA credit rating from S&P by augustflanagan on Friday August 05, 2011 @09:20PM (#2852553)
Isn't most of the US debt also financed by its own citizens?
[ Parent | on HN ]
Re:United States loses AAA credit rating from S&P by cma on Friday August 05, 2011 @09:40PM (#2852590)
Yes, about 70% of it.
[ Parent | on HN ]
Re:United States loses AAA credit rating from S&P by joezydeco on Friday August 05, 2011 @09:53PM (#2852627)
Really?

http://cache.boston.com/bonzai-fba/Globe_Graphic/2011/07/31/...

[EDIT] Sorry, read the original statement wrong. I was thinking the parent said 70% was held foreign, not vice-versa.

[ Parent | on HN ]
Re:United States loses AAA credit rating from S&P by nknight on Friday August 05, 2011 @10:07PM (#2852681)
Yes, really. Did you actually add the numbers up? The non-foreign components are nearly 70%.
[ Parent | on HN ]
Re:United States loses AAA credit rating from S&P by daemonize on Friday August 05, 2011 @09:18PM (#2852544)
Japan has no defense investment. 'nuff said.
[ Parent | on HN ]
Re:United States loses AAA credit rating from S&P by angus77 on Friday August 05, 2011 @10:48PM (#2852786)
Japan spends 3% of its annual budget on defense.
[ Parent | on HN ]
Re:United States loses AAA credit rating from S&P by nerfhammer on Friday August 05, 2011 @10:00PM (#2852655)
Yet they still have a debt-to-GDP ratio of 225%
[ Parent | on HN ]