Warren Buffet has a better credit rating than the USA

By Daniel Kruger and Bryan Keogh

March 22 (Bloomberg) — The bond market is saying that it’s safer to lend to Warren Buffett than Barack Obama.

Warren Buffet
Warren Buffet

Two-year notes sold by the billionaire’s Berkshire Hathaway Inc. in February yield 3.5 basis points less than Treasuries of similar maturity, according to data compiled by Bloomberg. Procter & Gamble Co., Johnson & Johnson and Lowe’s Cos. debt also traded at lower yields in recent weeks, a situation former Lehman Brothers Holdings Inc. chief fixed-income strategist Jack Malvey calls an “exceedingly rare” event in the history of the bond market.

The $2.59 trillion of Treasury Department sales since the start of 2009 have created a glut as the budget deficit swelled to a post-World War II-record 10 percent of the economy and raised concerns whether the U.S. deserves its AAA credit rating. The increased borrowing may also undermine the first-quarter rally in Treasuries as the economy improves.

“It’s a slap upside the head of the government,” said Mitchell Stapley, the chief fixed-income officer in Grand Rapids, Michigan, at Fifth Third Asset Management, which oversees $22 billion. “It could be the moment where hopefully you realize that risk is beginning to creep into your credit profile and the costs associated with that can be pretty scary.” Continue reading “Warren Buffet has a better credit rating than the USA”

An email from a friend

I received the following email from my friend, Bryan, tonight:

And on the very same day that Obama has done his best to transition us to a European socialist state, we find out that US Treasury Debt is now less creditworthy than highly rated US Corporate Debt — could you ever have imagine that?

http://www.bloomberg.com/apps/news?pid=20601087&sid=aYUeBnitz7nU

And the credit rating of the US will get worse as more debt is incurred and the deficits increase because of the healthcare bill.