As if Bank of America didn’t cause enough of a stir with its $5 monthly debit card charge …
A B of analyst issued a report predicting that U.S. debt will be downgraded again in November or early December.
His rationale: the so-called “super committee” designated to craft a plan to reduce the nation deficit and debt will fail to reach a compromise and the draconian default cuts will kick in.
Specifically,B of A analyst Ethan S. Harris wrote:
We expect a moderate slowdown in the beginning of next year, as two small policy shocks — another debt downgrade and fiscal tightening — hit the economy.
The “not-so-super” Deficit Commission is very unlikely to come up with a credible deficit-reduction plan.
The committee is more divided than the overall Congress
It is hard to imagine the liberal Democrats on the Committee agreeing to significant entitlement cuts.
And, all the Republican members have signed the “no taxes” pledge.
The credit rating agencies have strongly suggested that further rating cuts are likely if Congress does not come up with a credible long-run plan.
Hence, we expect at least one credit downgrade in late November or early December when the super Committee crashes.
Didn’t these jabrones see what happened to S&P, Gibson Guitars and the tanning salons?
The Homa Files 