We have lost our market gains from yesterday, and have no one to blame but the French. As it turns out we're not the only country whose credit worthiness is in question. The French banks have much invested in bonds from Italy and Spain, so it is rumored they will be the next to lose their AAA rating.
Who starts these rumors? It's someone within the media, possibly located within the US. It has been confirmed by rating agencies, and the French government that they are not in danger of losing their AAA rating. The news stating the French are next, has spread like wildfire through presses and on air personalities, ever since S&P announced on August 4, that the U.S. was a AA+.
What's the big deal about having good credit in this day and age? It's not, unless you plan on paying off the debt you incur. When you have a government that increases the deficit, and only foresees it rising in the future, then they hardly deserve to be considered credit worthy. Credit is not gift, but a liability. Through the past few years of financial turmoil, many countries have been bailed out. Only to learn after the money was lent, that they were going to fail anyways.
The reason Spain and Italy are such a hazard right now to European banks is due to the amount of money currently invested drastically exceeding that which was invested in Greece, Portugal, and Ireland. With so many countries being forced to live within their means, the governments will be borrowing at higher interest rates and further slowing economic growth.
It started with Fannie and Freddie, then GM, Chrysler, and Goldman Sachs. The times of bailing out companies seems minimal when considering that countries are now in need of bailout packages. Now that we've been told here in the states to live within our means, we have resorted to taunting the French with, "I see Paris, I see France, I see a downgrade from the money you grants."
Who starts these rumors? It's someone within the media, possibly located within the US. It has been confirmed by rating agencies, and the French government that they are not in danger of losing their AAA rating. The news stating the French are next, has spread like wildfire through presses and on air personalities, ever since S&P announced on August 4, that the U.S. was a AA+.
What's the big deal about having good credit in this day and age? It's not, unless you plan on paying off the debt you incur. When you have a government that increases the deficit, and only foresees it rising in the future, then they hardly deserve to be considered credit worthy. Credit is not gift, but a liability. Through the past few years of financial turmoil, many countries have been bailed out. Only to learn after the money was lent, that they were going to fail anyways.
The reason Spain and Italy are such a hazard right now to European banks is due to the amount of money currently invested drastically exceeding that which was invested in Greece, Portugal, and Ireland. With so many countries being forced to live within their means, the governments will be borrowing at higher interest rates and further slowing economic growth.
It started with Fannie and Freddie, then GM, Chrysler, and Goldman Sachs. The times of bailing out companies seems minimal when considering that countries are now in need of bailout packages. Now that we've been told here in the states to live within our means, we have resorted to taunting the French with, "I see Paris, I see France, I see a downgrade from the money you grants."
