Obama Isn’t Concerned About Change In Credit Rating

Bloomberg reports, Gibbs Says He Doesn’t Believe U.S. Credit Rating Will Be Cut.

White House Press Secretary Robert Gibbs said he doesn’t believe the U.S.’s AAA credit rating will be cut.

In response to questions at his regular briefing, Gibbs said President Barack Obama isn’t concerned about “a change in our credit rating.” Asked if he expects a cut, he said, “I don’t believe they will be cut.”

Investors sent U.S. bond and currency markets lower amid concern for the AAA rating after Standard & Poor’s lowered its outlook yesterday on the U.K.’s AAA rating to “negative” from “stable.”

A few comments and questions.

1. Gibbs should know better than to make a casual comment about our sovereign credit rating. The market listens to every word emanating from an administration to detect the level of seriousness and “risk management” being employed.

2. Is Gibbs indicating that President Obama isn’t concerned in that he does not believe it will be cut or does not really care if it is cut? There is an enormous difference in those interpretations. Gibbs should not be vague.

3. When asked his own opinion, Gibbs provides a glib response without substance. He does not inspire confidence!

The Press Secretary should understand that the markets listen, monitor, study, and react to each and every word from the Administration. I and others would want greater clarity from financial leaders in Washington. That said, they pick and choose their words very carefully knowing that Wall Street picks up on every nuance.

Wall Street and every other financial center in the world detests an official who dismissively passes off a topic of very serious substance.

Why and how do things like this happen? Inexperience and little market knowledge.

For what it is worth,from the time of this news release, long term interest rates increased another 3 basis points.

About Larry Doyle 522 Articles

Larry Doyle embarked on his Wall Street career in 1983 as a mortgage-backed securities trader for The First Boston Corporation. He was involved in the growth and development of the secondary mortgage market from its near infancy.

After close to 7 years at First Boston, Larry joined Bear Stearns in early 1990 as a mortgage trader. In 1993, Larry was named a Senior Managing Director at the firm. He left Bear to join Union Bank of Switzerland in late 1996 as Head of Mortgage Trading.

In 1998, after 15 years of trading and precipitated by Swiss Bank’s takeover of UBS, Larry moved from trading to sales as a senior salesperson at Bank of America. His move into sales led him to the role as National Sales Manager for Securitized Products at JP Morgan Chase in 2000. He was integrally involved in developing the department, hiring 40 salespeople, and generating $300 million in sales revenue. He left JP Morgan in 2006.

Throughout his career, Larry eagerly engaged clients and colleagues. He has mentored dozens of junior colleagues, recruited at a number of colleges and universities, and interviewed hundreds. He has also had extensive public speaking experience. Additionally, Larry served as Chair of the Mortgage Trading Committee for the Public Securities Association (PSA) in the mid-90s.

Larry graduated Cum Laude, Phi Beta Kappa in 1983 from the College of the Holy Cross.

Visit: Sense On Cents

Be the first to comment

Leave a Reply

Your email address will not be published.