S&P Downgrades Fannie Mae, Freddie Mac, Others
Published: Monday, 8 Aug 2011 | 10:53 AM ET Text Size By:
Associated Press with CNBC.com
Standard & Poor's downgraded the ratings of government-sponsored enterprises Fannie Mae and Freddie Mac Monday, citing their reliance on U.S. government.
Michele Constantini | PhotoAlto | Getty Images
--------------------------------------------------------------------------------
Both Fannie and Freddie were lowered to AA+ from triple-A.
The downgrade came amid a number of other ratings actions that are rippling from S&P's decision late Friday to cut the credit rating of the United States one notch from triple-A to AA+.
S&P also cut ratings for several of the main arteries of the US financial system—the Depository Trust Co. National Securities Clearing Corp., Fixed Income Clearing Corp. and the Options Clearing Corp.—were cut one notch to AA-plus.
These institutions, previously rated AAA by S&P, clear and process trades and are crucial to the daily workings of the U.S. financial markets.
Officials at S&P said they plan to indicate how local and state governments and insurers will be affected by the rating agency's downgrade of long-term U.S. debt .
S&P officials told reporters Monday that the agency is looking at key sectors that are linked to the U.S. debt, and will announce "shortly" how those ratings might be affected.
The officials did not name any specific governments or insurance groups. But they said triple-A-rated insurance groups and state and local governments affected by possible consolidation of programs in Washington would likely be reviewed.
The S&P noted that some of the fiscal indicators in the UK are worse than in the U.S., especially in terms of its debt, but it also doesn't expect the U.S.'s debt burden to decline. For France, the S&P said it has addressed its long-term entitlement programs effectively and showed the politcal will to deal with issues.
The S&P expects the debt burden in Germany, the UK and France to peak in a few years and then decline.
It said the U.S.'s political environment was strong, but not as strong as most highly rated governments. It noted elected officials have been unable to put U.S. finances on sustained footing comparable to other triple-A-rated sovereigns.
For the S&P to downgrade the U.S. even futher, it said it would need greater fiscal slippage than it anticipates. On the flipside, the possibility of upgrade depends on policymakers showing broader consensus on how to make fiscal policy choices.
The S&P earlier said that it thinks its sovereign ratings are robust and ahead of its rivals, and that it plans to continue that track record. It also noted that printing money doesn't deliver a triple-A rating.
________________________ _________
LMFAO! ! ! ! !
OBAMA / DODD / FRANK - specifically excluded F&F from any oversight or regulation under that 40k page monster they passed and have been showering those agencies with HUNDREDS OF BILLIONS since 2008.
What a fucking disaster.
But shit - there are fundraisers and hip hop parties to attend yo!
