The Homa Files

As you read this, keep in mind that Moody’s (a Warren Buffet company), rated billions of dollars of mortgage backed securities AAA …

Moody’s warned Monday that it could move a step closer to cutting the U.S. Aaa rating if President Obama’s tax and unemployment benefit package becomes law.

The plan agreed to by President Obama and Republican leaders last week could push up debt levels, increasing the likelihood of a negative outlook on the United States rating in the coming two years, the ratings agency said.

A negative outlook, if adopted, would make a rating cut more likely over the following 12-to-18 months.

For the United States, a loss of the top Aaa rating, reduces the appeal of U.S. Treasuries, which currently rank as among the world’s safest investments.

“From a credit perspective, the negative effects on government finance are likely to outweigh the positive effects of higher economic growth.”

Moody’s May Cut US Rating on Tax Package, 13 Dec 2010
http://www.cnbc.com/id/40641123

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