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Chinese independent credit agency downgrades US twice
Chinese independent credit agency downgrades US twice
Chinese independent credit agency downgrades US twice | NWCN.com Washington - Oregon - Idaho
by STAN GRANT / CNN
NWCN.com
Posted on August 2, 2011 at 7:45 AM
One international credit rating agency has already downgraded the U.S. not once, but twice. It's China's only independent global credit rating firm.
Guan Jianzhong has poured over the U.S. financial books and he doesn't like what he sees. He once worked as an account for a Chinese firm on Wall Street but now he says he has lost faith in America's economy and its political system.
“The two political parties acted in a very irresponsible way and greatly exposed the negative impact of the political system on the economy,”said Guan.
Guan heads up Dagong, China's only international credit rating agency. While the big three ratings agencies - Moodys, Fitch, Standard and Poors -- watch and wait, Dagong has already downgraded the U.S. once last November. And now on the back of the debt crisis, it is marking America down again.
“Our downgrading of the U.S simply reflects the U.S. inability to pay back its debt. It reflects reality,” said Guan.
The people who work here pride themselves on being independent. Dagong says it is not controlled by the Chinese government and is making the tough calls other ratings agencies will not.
“People are used to credit ratings by the Big 3, but the financial crisis has proved them wrong. They can no longer shoulder the responsibility of rating the world,” said Guan.
Downgrading the U.S. could hurt China. As America's biggest international creditor, any damage to U.S. financial credibility could cost China billions of dollars.
Analysts say China, with big reserves of cash and committed to low currency, high export growth, is tied to the U.S., like it or not.
“There aren't that many other markets that are as deep or as liquid as treasuries so when they accumulate reserves this is the only place they can put them,” said Guan.
Dagong though has a warning: China needs to start looking elsewhere to put its money.
Chinese independent credit agency downgrades US twice | NWCN.com Washington - Oregon - Idaho
by STAN GRANT / CNN
NWCN.com
Posted on August 2, 2011 at 7:45 AM
One international credit rating agency has already downgraded the U.S. not once, but twice. It's China's only independent global credit rating firm.
Guan Jianzhong has poured over the U.S. financial books and he doesn't like what he sees. He once worked as an account for a Chinese firm on Wall Street but now he says he has lost faith in America's economy and its political system.
“The two political parties acted in a very irresponsible way and greatly exposed the negative impact of the political system on the economy,”said Guan.
Guan heads up Dagong, China's only international credit rating agency. While the big three ratings agencies - Moodys, Fitch, Standard and Poors -- watch and wait, Dagong has already downgraded the U.S. once last November. And now on the back of the debt crisis, it is marking America down again.
“Our downgrading of the U.S simply reflects the U.S. inability to pay back its debt. It reflects reality,” said Guan.
The people who work here pride themselves on being independent. Dagong says it is not controlled by the Chinese government and is making the tough calls other ratings agencies will not.
“People are used to credit ratings by the Big 3, but the financial crisis has proved them wrong. They can no longer shoulder the responsibility of rating the world,” said Guan.
Downgrading the U.S. could hurt China. As America's biggest international creditor, any damage to U.S. financial credibility could cost China billions of dollars.
Analysts say China, with big reserves of cash and committed to low currency, high export growth, is tied to the U.S., like it or not.
“There aren't that many other markets that are as deep or as liquid as treasuries so when they accumulate reserves this is the only place they can put them,” said Guan.
Dagong though has a warning: China needs to start looking elsewhere to put its money.
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