The Credit Downgrade

Updated 1 year ago

The Credit DowngradeWhat is it- S & P – a credit rating agency- has said we are a higher riskthan the triple A rating which was called ‘no risk.” Why- We spend more than we make and our recent ‘fiscal consolidation planfalls short’ of really solving long term debt and repayment. The ‘debtceiling plan isn’t cutting enough planned spending.What does it mean for the US- practically it will mean what it would mean atyour house if your credit rating went down: higher interest rates = moreexpensive to borrow money. What does it mean for me- higher interest rates across the board, on creditcards, mortgages, etc.What happens next? – S & P will re-evaluate in 6- 24 months for a potentialADDITIONAL downgrade. How do we turn this around?- Cut our expenses.becomemore efficient. In an interview, an S & P managing Director gave thechances for ANOTHER downgrade at a 1 in 3 chance. If the Deficit Committeesrecommendations are accepted S & P says we may stabilize at the New PresentAA+ rating.Marion R. Syversen, MBA – PresidentNorumbegaFinancial207.862.2952Marion@NorumbegaFinancial.comCheck out our website that includes weekly streaming Vote Norumbega Financial for Bangor’s Best Financial Planning Firm at Market Surveys of America Disclosure:Only securities and advisory services offered through Wall Street FinancialGroup, Inc. Registered Investment Advisor. Member FINRA/SIPC. Wall StreetFinancial Group, Inc., Norumbega Financial and all other entities listedherein are separate entities, independently owned and operated.