Tuesday, August 9, 2011

Bove: U.S. Closer To Junk Bond Status Than AAA

INTERESTING INTERVIEW WITH DICK BOVE ON CNBC, AND ONE I AGREE: The US credit rating would be even worse than its recent downgrade from Standard & Poor's if the nation was judged as a private company, banking analyst Dick Bove told CNBC Tuesday:

Speaking amid the hotly contested debate over whether the US should have lost its coveted triple-A rating in favor of the new Double-A plus, Bove said the US balance sheet and the burdensome national debt tell a clear story.

"You've got a company which is losing about $1.4 trillion this year, probably will lose somewhere around a trillion dollars over the next couple of years. It owes $14.4 trillion (and) over the next five years that will get up to $20 trillion," the Rochdale Securities analyst said.

"So there's no likelihood whatsoever that this particular company is able to pay down from its own resources the amount of debt that it has, nor is there any likelihood that it's going to get rid of its deficit," he added. "If that was a real company, of course, that would be a junk bond."

Read the whole thing.

1 comment:

NoSuchThingAsAnOpinion said...

This site seems welcoming.

Readers of the Dick Bove article might be interested in reading my response to his comments :)

I found a major flaw in his logic...

The article