After my many, many warnings about Donald Trump and his administration (I'll list those a little later)... It's official, Fitch has actually warned that the Trump administration is detrimental to sovereign ratings around the world. Keep in mind that we are in this world.

Fitch says Trump bad credit risk

Published in BoomBustBlog
From Bloomberg: Detroit Sells $250 Million Without Recent Disclosure Filings

March 11 (Bloomberg) -- Detroit, the largest U.S. city whose debt is rated below investment grade, will ask investors today to buy $250 million of its debt without having filed annual financial reports on time for five years.

The city, which warned investors in its preliminary official statement of the possibility of filing for Chapter 9 bankruptcy protection, is providing a June 30, 2008, financial statement, its most recent, to investors. A fiscal 2009 report is expected to be complete by May 31, said city spokesman Dan Lijana, in an e-mail.

...

The municipality is selling the same week that state and local governments are scheduled to bring more than $11 billion of long-term securities to market. The largest deals include $2 billion from California and $696 million from the District of Columbia.

Goldman Sachs

Detroit is selling $250 million of bonds through investment banks led byGoldman Sachs Group Inc. to help cover budget deficits expected to total $280 million this year. The deal will probably appeal to investors seeking high-yield municipal debt, predicted Ciccarone, precluding the city from a market with tax- exempt yields near three-month lows.

The city lost its investment-grade ratings as automobile makers in Michigan began cutting jobs and the tax revenue declined, which led to an expanding budget gap covered by short- term borrowing. The new bonds will spread repayment of the deficit debt across a longer period.

Detroit general obligations maturing in 2024 traded yesterday at a yield of 7.56 percent, according to Municipal Securities Rulemaking Board data. That compares with yields of 3.36 percent to 3.5 percent for top-rated 14-year municipal debt yesterday, according to Municipal Market Advisors Inc.

...

Detroit also disclosed there’s no precedent for how its state aid payments would be handled in the event of a Chapter 9 bankruptcy filing because there’s never been a local instance. “The lack of precedent in Michigan makes the risks associated with such a filing difficult to assess,” the preliminary offering statement said.

Financial Crisis

While the city is still in a financial crisis, “insolvency isn’t on the horizon or on the agenda,” said Mayor Dave Bing, in a prepared statement provided by Lijana  [Reggie Comment: Of course, which is why the warning is there in the prospectus!]. A request to make finance officials available for comment was declined by Lijana.

...

From Bloomberg: Detroit Sells $250 Million Without Recent Disclosure Filings

March 11 (Bloomberg) -- Detroit, the largest U.S. city whose debt is rated below investment grade, will ask investors today to buy $250 million of its debt without having filed annual financial reports on time for five years.

The city, which warned investors in its preliminary official statement of the possibility of filing for Chapter 9 bankruptcy protection, is providing a June 30, 2008, financial statement, its most recent, to investors. A fiscal 2009 report is expected to be complete by May 31, said city spokesman Dan Lijana, in an e-mail.

...

The municipality is selling the same week that state and local governments are scheduled to bring more than $11 billion of long-term securities to market. The largest deals include $2 billion from California and $696 million from the District of Columbia.

Goldman Sachs

Detroit is selling $250 million of bonds through investment banks led byGoldman Sachs Group Inc. to help cover budget deficits expected to total $280 million this year. The deal will probably appeal to investors seeking high-yield municipal debt, predicted Ciccarone, precluding the city from a market with tax- exempt yields near three-month lows.

The city lost its investment-grade ratings as automobile makers in Michigan began cutting jobs and the tax revenue declined, which led to an expanding budget gap covered by short- term borrowing. The new bonds will spread repayment of the deficit debt across a longer period.

Detroit general obligations maturing in 2024 traded yesterday at a yield of 7.56 percent, according to Municipal Securities Rulemaking Board data. That compares with yields of 3.36 percent to 3.5 percent for top-rated 14-year municipal debt yesterday, according to Municipal Market Advisors Inc.

...

Detroit also disclosed there’s no precedent for how its state aid payments would be handled in the event of a Chapter 9 bankruptcy filing because there’s never been a local instance. “The lack of precedent in Michigan makes the risks associated with such a filing difficult to assess,” the preliminary offering statement said.

Financial Crisis

While the city is still in a financial crisis, “insolvency isn’t on the horizon or on the agenda,” said Mayor Dave Bing, in a prepared statement provided by Lijana  [Reggie Comment: Of course, which is why the warning is there in the prospectus!]. A request to make finance officials available for comment was declined by Lijana.

...

I could have sworn that I posted I was taken small positions against the publicly rated ratings agencies a month or so ago, but when I searched for the post to comment on it I couldn't find it. My apologies. Well, it seems as if the chickens have come home to roost for this group, and none too soon if I have anything to say about.

I have written alot about these clowns, you can search my site for the term "ratings agencies' for a list, but a picture (or two) is worth a thousand words (from A Super Scary Halloween Tale of 104 Basis Points Pt I & II, by Reggie Middleton)...

I could have sworn that I posted I was taken small positions against the publicly rated ratings agencies a month or so ago, but when I searched for the post to comment on it I couldn't find it. My apologies. Well, it seems as if the chickens have come home to roost for this group, and none too soon if I have anything to say about.

I have written alot about these clowns, you can search my site for the term "ratings agencies' for a list, but a picture (or two) is worth a thousand words (from A Super Scary Halloween Tale of 104 Basis Points Pt I & II, by Reggie Middleton)...

Tuesday, 08 September 2009 20:00

News for this day 9 of September, 2009

Buffett Joins Call to End 'Short-Termism' in Markets: But Mr. Buffet, "short-termism" is how Wall Street makes most of its money. How in the hell do you fit long term thinking into quarterly performance reviews and annual bonuses? Mr. Buffet, are you DAFT? Don't you know what is important in life (on Wall Street)??? See Is a Crash Impending? as we wonder exactly what is keeping this market afloat.

Somebody in these stories is wrong. Who do you think it is??? Consumer Credit Plummets by Record $21.6 Billion vs Retail Hiring Study Shows Signs of Growing Confidence in U.S. Recover. On the same front page in Bloomberg - U.S. companies are still reducing the ranks of temporary workers, showing that any rebound in overall employment won’t happen soon, according to William Hester, an analyst at Hussman Econometrics... 

...the number of temporary employees with nonfarm payrolls since 1990, according to data compiled by the Labor Department. Increases in the number of temporary jobs in 1991 and 2003 preceded similar recoveries in payrolls, as the chart illustrates.

“Temporary hiring is a reliable leading indicator,” Hester wrote yesterday in a report that featured a similar chart. Last month’s decline in these jobs was “one of the most discouraging data points” in the latest employment report, he added.

The number of temporary workers dropped by 65,000 in August to 1.74 million. The total has fallen each month since January 2008, a month after the current U.S. recession officially started. During the 20-month streak, temporary jobs have declined by 33 percent.

Further losses “would probably push back any recovery in nonfarm payrolls,” Hester wrote. “Temporary hiring will almost surely bottom prior to overall employment.”

Separately, Manpower Inc. said today in a statement that its index of U.S. companies’ hiring plans set a record low for the third straight quarter. The latest reading was based on the outlook for fourth-quarter jobs. Manpower, the world’s second- largest staffing firm, began compiling the gauge in 1962.

Tuesday, 08 September 2009 20:00

News for this day 9 of September, 2009

Buffett Joins Call to End 'Short-Termism' in Markets: But Mr. Buffet, "short-termism" is how Wall Street makes most of its money. How in the hell do you fit long term thinking into quarterly performance reviews and annual bonuses? Mr. Buffet, are you DAFT? Don't you know what is important in life (on Wall Street)??? See Is a Crash Impending? as we wonder exactly what is keeping this market afloat.

Somebody in these stories is wrong. Who do you think it is??? Consumer Credit Plummets by Record $21.6 Billion vs Retail Hiring Study Shows Signs of Growing Confidence in U.S. Recover. On the same front page in Bloomberg - U.S. companies are still reducing the ranks of temporary workers, showing that any rebound in overall employment won’t happen soon, according to William Hester, an analyst at Hussman Econometrics... 

...the number of temporary employees with nonfarm payrolls since 1990, according to data compiled by the Labor Department. Increases in the number of temporary jobs in 1991 and 2003 preceded similar recoveries in payrolls, as the chart illustrates.

“Temporary hiring is a reliable leading indicator,” Hester wrote yesterday in a report that featured a similar chart. Last month’s decline in these jobs was “one of the most discouraging data points” in the latest employment report, he added.

The number of temporary workers dropped by 65,000 in August to 1.74 million. The total has fallen each month since January 2008, a month after the current U.S. recession officially started. During the 20-month streak, temporary jobs have declined by 33 percent.

Further losses “would probably push back any recovery in nonfarm payrolls,” Hester wrote. “Temporary hiring will almost surely bottom prior to overall employment.”

Separately, Manpower Inc. said today in a statement that its index of U.S. companies’ hiring plans set a record low for the third straight quarter. The latest reading was based on the outlook for fourth-quarter jobs. Manpower, the world’s second- largest staffing firm, began compiling the gauge in 1962.

Moody's and S&P are going after California's credit rating, which will really hurt some bond investors and insurers. I told you so, and I told it to you over a year ago before anybody else did... From Reuters:

The ratings agency's decision to place California's general obligation debt on alert for such a dramatic possible downgrade stunned state officials.

"I cannot remember reading a ratings note that raised the specter of a multi-notch downgrade," said H.D. Palmer, a spokesman for Governor Arnold Schwarzenegger. "It's another clear warning from the financial markets that there will be substantial and costly consequences if the legislature does not send the governor a budget that he can sign."

Moody's in a statement cited California's expected massive shortfall for fiscal 2010 of more than 20 percent of its general fund budget and limited options for plugging it.

The state's current A2 credit rating is Moody's sixth-highest investment grade and makes California the lowest rated of the 50 states. The A2 rating is just five notches above speculative status and Moody's raised the potential for the rating to tumble toward "junk" status.

SAN FRANCISCO, June 19 (Reuters) - California, struggling to close a $24.3 billion budget gap, faces the prospect of a "multi-notch" downgrade in its credit rating if the state's legislature fails to act quickly to produce a budget, Moody's Investors Service warned on Friday.

And from Reggie's Historical Archives...