You are here: Economy » Dagong cuts US sovereign rating one level to A, on par with Russia and South Africa
Patrick Chovanec talked to Bloomberg earlier today about the Chinese rating agency Dagong’s downgrade of US sovereign debt to Single-A. Chovanec says that Dagong is ‘hyper-sensitive’ to US risk and their downgrades to the US have resulted in a rating lower than some local Chinese government ratings where the local governments have serious liquidity issues.
Clearly this is very political as Chovanec mentions Dagong comments about the bankruptcy of American culture and the dysfunction of American political governance. Chovanec is right that the question is two-fold. A, how accurate will Dagong’s prognostications prove to be with the benefit of hindsight? And B, will Dagong have an influence on Chinese government currency and economic policy?
Good interview. Video below
About Edward Harrison
Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College. Edward also writes a premium financial newsletter. Sign up here for a free trial.
No related posts.
Like us on Facebook
Follow Edward on Twitter
- The new normal that never was
- Negative interest rates are just a tax on reserves that lowers net interest margins
- The German current account surplus requires deficits elsewhere
- Is the Fed panicked about the downshift in the US economy?
- The Eurozone has been infected by the US slowdown
- Britain, Brexit, and sovereignty
- Why China cares about Japan’s negative rates
- My thoughts on the US Q4 2015 GDP numbers
- Is there a US Goldilocks scenario possible for 2016?
- The Saudis as the driving surplus oil producer
- The Fed rate hike and the potential for US recession
- When market contagion occurs, this is how it will happen
- Asset allocation in a period of wealth mean reversion
- The mess in Portugal is negative for debt sustainability
- Jensen: How long bonds could actually outperform equities
- Profit mean reversion and recession
- Credit Writedowns is ending paid subscriptions for now
- If we don’t understand both sides of China’s balance sheet, we understand neither
- Do markets determine the value of the RMB?
- China’s stock markets and revisiting 2011 predictions