Egan-Jones Rating Company is officially recognized by the Security and Exchange Commission. This company has downgraded the credit rating of the United States from AAA to AA+. Here is a statement from their site concerning their services:
We aren’t particularly pretty or glossy instead, we give you highly accurate NRSRO qualified ratings in as few words as possible. You will receive transparent, predictive-value credit ratings and equity analysis with investment conclusions necessary to make money and avoid losses across asset classes. Our ratings are light on personal opinion, heavy on numbers and their strategic investment implications, not rhetoric. Ratings from Egan-Jones are performance driven and identify investment implications for both equity and fixed income long/short funds portfolios.
This company actually does what it is supposed to do: they give their clients objective credit ratings based on an equity analysis. The recent political posturing seen by Standard & Poors and Moodys has tainted their credibility. What does this mean to the average person? It shows the vulnerability of the stock market to a crash similar to 1929 that is being covered up by the government and other credit rating agencies in bed with the SEC.
The ramifications of a stock market collapse will be worse that the Great Depression since the government and personal debt of our country will make the US dollar relatively worthless. We have been warned of the upcoming effects of hyperinflation and it is now time to take these warnings seriously.
Egan-Jones has become the first US rating agency to downgrade the country’s sovereign credit rating from triple A to double A plus as it focuses on the rapid rise in outstanding debt over the past five years.
Egan-Jones was officially recognised in 2008 by the Securities and Exchange Commission and, unlike its larger rivals, generates revenue from institutional investors and not from issuers of debt. During the past decade it downgraded US carmakers and structured credit products before similar decisions by the big rating agencies.
The move comes after Moody’s and Standard & Poor’s both placed the US on watch for a downgrade last week. Washington has struggled to reach agreement on raising the country’s $14,300bn debt ceiling and the US Treasury has warned it may default if there is no deal by August 2.
Sean Egan, managing director of Egan-Jones, said that it classified the US rating outlook as “developing” and was looking beyond the current debt ceiling debate in Washington.
“We are watching to see what comes out of Washington, but will make a distinction between delinquency and an outright default,” he said.
Of greater concern for Egan-Jones is the rapid rise in outstanding debt and the prospect of retiring baby boomers severely straining social security and healthcare in the coming decade.
The agency said in its downgrade notice: The major factor driving credit quality is the relatively high level of debt and the difficulty in significantly cutting spending.