The Murdoch
press gang were quick to yell "fire"
THE Australian sharemarket's dramatic $133 billion plunge in the past week has wiped out all the gains made by superannuation funds last financial year and threatens to drive returns lower this year.
Another $33bn was stripped from the value of Australian stocks yesterday on top of last week's $100bn selldown, as investors flooded brokers with selling orders following Standard & Poor's decision to downgrade the sovereign credit rating of the US.
As others
noted, it is fear of reduced earnings from a double dip recession that has seen investors have been piling into, not out of US debt. As for S&P, traders said
Why in the world does anyone care what the ratings agencies think given their track record three years ago?
China watcher George Chen
observes .Moody’s decision to keep the United States “Triple-A” and Dagong’s decision to downgrade the U.S. (made, some people say, for the sake of Beijing’s political agenda in Sino-U.S. relations) actually mean the same thing — that such ratings are merely subjective rather than based on facts and are in fact a potential and indirect risk to global economic recovery.
In the statement issued by Dagong downgrading the United States, the firm should probably have noted in its disclaimer that the U.S. Securities and Exchange Commission had denied Dagong’s application to become an officially recognised bond rater in the U.S.
Since then, Dagong has often verbally attacked the credibility of the SEC and the U.S. government. Google the news and you will find more buzz about the bad relationship.
So, tell me, who do you believe these days?
