Friday, February 06, 2009

Moody's says U.S. financial position deteriorating. DXY, HUI, XAU, GDX, AUY, SLW, TNR.v, SST.v, RMK.v, MGN, SBB.v, RVM.to, CNU.v, FVI.v

First pitch from rating agencies on US Dollar!
"NEW YORK (MarketWatch) -- The Aaa-rating coveted by the U.S. is still stable, though it's unclear how much the government's interventions in financial markets and economic stimulus will affect its deteriorating financial position, Moody's Investors Service said Thursday. U.S. Treasurys issued to the public are "most certain" to be paid, wrote Steven Hess, Moody's senior credit officer, in a research report. The government had $5.8 trillion in debt held by the public at the end of 2008, the rating agency said. The government's ratio of debt to gross domestic product, and debt and interest payments to federal revenue, will rise to levels that are high for a country rated Aaa-rated. "Whether in 2010 or after, interest rates are almost certain to rise from their current low levels and the affordability of the federal government debt will deteriorate," analysts said. It's difficult to determine the impact of purchases of preferred stock of housing agencies Freddie Mac FRE and Fannie Mae FNM, any purchases under the Troubled Asset Relief Program or other capital provided to banks. As "these figures represent the purchase of assets, their ultimate effect on government debt is not clear," analysts said. "Government could realize a net gain or a net loss." Nonetheless, "structural fundamentals, political stability, and still favorable post-crisis economic prospects support the stable outlook for the Aaa ratings of the United States."
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