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And here comes the next round of downgrades. From S&P:

Standard & Poor’s Ratings Services said today that it lowered its issuer credit ratings and related issue ratings on 10 of 12 Federal Home Loan Banks (FHLBs) and the senior debt issued by the FHLB System to ‘AA+’ from ‘AAA’. We have also lowered the ratings on the senior debt issued by the Federal Farm Credit Banks to ‘AA+’ from ‘AAA’. The ratings on the individual farm member banks are not affected.

In addition, we have lowered the senior issue ratings on Fannie Mae and Freddie Mac to ‘AA+’ from ‘AAA’. Our ‘A’ subordinated debt rating and our ‘C’ rating on the preferred stock of these entities remain unchanged.

Finally, we have affirmed the short-term issue ratings for these entities at ‘A-1+’ and removed them from CreditWatch Negative where they were placed July 15, 2011.

How long before the banks, insurance companies, pensions, state and local governments, and other large holders of Treasuries start to feel the pinch?



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