Third World country Canada gets AAA rating renewed

[Islandman]

Bond rating agency Moody's Investor Services is maintaining Canada's debt rating at triple-A, the highest possible.

The firm said Thursday the AAA rating was warranted, citing among other things, the country's "high degree of economic resiliency" and deficit-cutting efforts by the federal and provincial governments.

It based its assumption about resiliency on Canada's "high per capita income, the large scale of the economy and its diversity, including natural resource industries and a competitive manufacturing sector, as well as a well-developed and well-regulated financial market."

Moody's said there are risks posed by Canada's housing market — where many mortgages are insured by the federal Canada Mortgage and Housing Corporation — and Quebec's sovereignty issues, but it rated those as low.

Moody's considered a major downturn of the housing market unlikely and, even in an extreme case, Ottawa's extra costs would be relatively small.

Similarly, Quebec's sovereignty movement doesn't seem to pose a significant risk since the issue doesn't appear high on the political agenda.

Some market watchers have warned that the U.S. is in danger of losing its triple-A rating, especially if the current debt ceiling talks fail to make a significant dent in the deficit.

[Islandman]

First World country USAs debt downgrade looking more likely

Deven Sharma, president of Standard & Poor's, told a House subcommittee Wednesday that if lawmakers can work out a 'grand bargain' with $4 trillion in deficit cuts over the next decade, the US may yet keep its AAA rating.

Deven Sharma testifies before Congress in this 2008 file photo. On Wednesday, Mr. Sharma told a House subcommittee that the US credit rating is in jeopardy if it stays on its current trajectory, with massive deficits and growing debt.

The head of a major credit-rating firm delivered a "good news, bad news" message on Wednesday, telling Congress that the US needs fiscal reform but that America might be able to keep its triple-A credit rating.

Deven Sharma, president of Standard & Poor's, said a plan for deficit reduction in the range of $4 trillion over the next 10 years could allow his firm to maintain its AAA rating on debts issued by the US Treasury.

Groups such as President Obama's bipartisan fiscal commission have charted plans on that scale – cutting federal deficits roughly in half – and in recent weeks, Mr. Obama and House Speaker John Boehner have discussed the possibility of such a "grand bargain" to fix US finances.

The bad news: Sharp partisan differences are dimming hopes for a fiscal-reform package on that scale. It now appears likely that a vote to raise the so-called debt ceiling (a cap on Treasury borrowing) above $14.3 trillion will be paired with a smaller-scale plan for deficit reduction worth perhaps $2 trillion or $3 trillion.

Moreover, if Congress fails to strike any deal that raises the debt ceiling by Aug. 2, finance experts generally expect that firms like Standard & Poor's would move to downgrade the US rating. That could result in higher interest rates, not just for the Treasury but also for other types of borrowers, from businesses to buyers of homes and cars.

Mr. Sharma of S&P made his comments during a hearing of a House Financial Services subcommittee. The meeting focused largely on regulation of the credit-rating industry, but the looming risk of a US default brought concern about the federal government's own rating to the forefront.

Rep. Scott Garrett (R) of New Jersey asked Sharma if he thought that deficit reduction totaling less than $4 trillion would be able to maintain the AAA rating.

"I would leave that to our analysts to determine that," Sharma responded. He said S&P is waiting to see a definitive policy before passing judgment.

What's clear, however, is that S&P and other rating agencies view the current US path as unsustainable. High federal deficits have pushed America's total debt rapidly upward, and without a course correction, that trend is poised to continue, largely because of baby boomer retirements and rising interest costs.

Sharma noted that even a AAA credit rating (S&P's highest) does not mean the US will not default on its debt. It's just a signal that the risk is very low. Conversely, a move to downgrade the US by a notch or more wouldn't signal that default is expected, just that the risk has risen.

The Dow Jones Industrial Average fell sharply on Wednesday (closing near 12300), in part because of signs of cooling in corporate earnings but also because of concern over the protracted debt-ceiling impasse in Washington.

[Reggaedoc]

Oh please Islandman. If Canada was a nonwhite country with the same economic profile, it would have been classified as a developing nation. Canada?. Not impressed.

[HL]

Very glad you bring this up.

What is the credit rating for Jamaica?

King Maudib, Don Uno...the knowledgable Mosiah, King Karl.... anyone...?

Thanks in advance.

[HL]

Reggae PhD. what is the credit rating of Jamaica?

Thanks.

[Islandman]

Around B since the JDX thing.

[Reggaedoc]

Good question. I have no idea, but I think if we were an appendage, goegraphically, and economically, of the USA, as Canada is, our rating would be the same as Canada. They would still call us 3rd world though, because we would still be a nonwhite country. Canada is a joke.

[Muadib]

Phone credit rating high !

[Hortical]

Brethen yuh having a rum & coke this afternoon? Canada is far from being classified as a third world country.

[HL]

...man yuh can dance...!!

woh woooooy!!!

[Reggaedoc]

Yeh man El Dorado 15 year. Given its resources vs its achievements, Canada should be classified as a developing nation at best.

Lets face it, people who migrate to Canada rather than to the USA, do so not out of desire, but simply because of the lower imigration requirements, and the generous social welfare system of Canada. Thats is plain and simple. They would much rather be in America. Glorified 3rd world my friend.

[Scaly Spurs]

Around B since the JDX thing.

I think it's a B3 my Moodys, which is as close to default as you can get without doing it.

In others words if a Hurricane come too close to the Island we get Juk.

[Muadib]

I think it's a B3 my Moodys, which is as close to default as you can get without doing it.

In others if a Hurricane come too close to the Island we get Juk.

And yuh still have eddiat ah talk bout progress and poverty numbers undah di PNP..

Ah bwoy..

[Reggaedoc]

Gee. Thats like getting an E for effort on an exam.

[Assasin]

you are correct.