Why Does Warren Buffett Think the United States Should Be Rated AAAA?

Warren Buffett has publicly stated that the United States should not have been downgraded by Standard & Poor’s. In fact, he asserted that the country would rate AAAA if such it was available.


Is Mr. Buffett correct or is he in the back pocket of the Obama administration? A former Moody’s senior vice president has now admitted that the firm suppressed its own analysts’ concerns in order to make profits. Moody’s has not downgraded the credit rating of the United States.  Eric Holder has launched an investigation into these same allegations at Standard & Poor’s but not Moody’s or Fitch. This is understandable since Mr. Buffett’s Berkshire Hathaway owns 12.46% of Moody’s. Mr. Buffett thinks the US should be rated AAAA because he is trying to cover his posterior in the upcoming scandals and keep his excellent relationship with the Obama administration intact.

10. Moody’s (MCO) – Bershire Hathaway Holdings:

Holding Value: $929.2 million
Shares: 28,415,250
Stake in Company:
12.46 percent

If Moody’s credit rating of the United States was bought in exchange for political favors and profits, the consequences on Wall Street will be substantial.

David DeGerolamo

Moody’s managers pressured analysts, former executive says

The Moody’s credit-rating agency has been widely blamed for contributing to the financial bubble and its devastating implosion by giving high grades to dubious investments.

Now one of its own is leading the criticism.

In an 80-page letter to federal regulators, a former Moody’s senior vice president says the firm systematically squelched its analysts’ private doubts to keep deals and profits flowing.

Moody’s managers intimidated analysts who stood in the way of favorable ratings, and its compliance department harassed employees who took an independent stand, according to the former analyst, William J. Harrington.

According to Harrington, a fundamental conflict of interest permeated the firm’s culture: Like other credit rating agencies, Moody’s is paid by the very companies whose securities it is supposed to grade objectively.

“Moody’s incentivized an analyst to accede to all items demanded by an external paymaster and to work to the paymaster’s schedule,” Harrington wrote.


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2 Responses to Why Does Warren Buffett Think the United States Should Be Rated AAAA?

  1. Hans says:

    “On Monday, August 15, billionaire Warren Buffett argued in an op-ed for the The New York Times that his taxes should be raised. He claimed that giving the Federal State more of his money would be a good thing.

    We disagree. We think Mr. Buffett’s investments do more social good than his taxes do. Here’s why…

    None of Mr. Buffett’s companies use force to compel people to do business with them, but everything The States does relies on coercion. This automatically makes Mr. Buffett’s investments better than his tax payments. In addition….

    Mr. Buffett’s companies must serve their customers, or go bankrupt. By contrast, Statist programs almost always receive increased budgets when they fail. Thus, businesses have an incentive to use resources wisely, while The State has incentives to waste resources. This is why money spent by The Coercive Sector (The State) tends to have less social utility than money spent by The Voluntary Sector (businesses and charities).

    In short, businesses tend to be pro-social because they serve society, while The State tends to be anti-social, because it’s wasteful and coercive. “

    Read more: “How Warren Buffett is Wrong”

  2. semiramis says:

    Another opinion, you decide: «Open Letter to Warren Buffett: Put Your Money Where Your Mouth Is» http://ampedstatus.org/open-letter-to-warren-buffett-put-your-money-where-your-mouth-is/

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