Obamacare causes Moody's to turn negative on healthcare companies...

It's only going to get worse because the worse is yet to come. 

Via The Washington Times:

Moody’s Investor Service has changed its outlook for the U.S. health care insurance sector from stable to negative, citing Obamacare’s rollout and the uncertainty it brings.
The private credit rating agency said potential fallout from the Affordable Care Act’s implementation — including changes to the individual market and the impact of the law’s “employer mandate” on commercial group plans in January 2015  —  presents the greatest challenge to health insurers’ credit profile. Lower reimbursement rates among Medicare Advantage plans also are creating financial pressure, it said.
“While all of these issues had been on our radar screen as we approached 2014, a new development and a key factor for the change in outlook is the unstable and evolving regulatory environment under which the sector is operating,” Moody's said. “Notably, new regulations and presidential announcements over the last several months with respect to the ACA have imposed operational changes well after product and pricing decisions had been finalized.”

It has begun: Credit-research firm downgrades U.S. government debt to AA-

Don't be surprised if other credit rating firms follow suit...

NEW YORK — Egan-Jones, an independent credit-research firm, downgraded its rating on U.S. government debt to AA- from AA on Friday, citing the Federal Reserve’s plans to try to stimulate the economy.

The credit rating agency said the Fed’s plans to buy mortgage bonds will likely hurt the economy more than help it.

The plan will weaken the value of the dollar and push up prices for oil and other commodities, Egan-Jones said. That would leave less for consumers to spend on other things.

But at the same time, Egan-Jones warned that the federal government’s borrowing costs are likely to slowly rise as the global economy recovers.

On Thursday, the Fed said it would buy $40 billion of mortgage bonds a month to help the economic recovery.

It’s the second time the Haverford, Pa. shop has downgraded U.S. government debt in five months. In April, Egan-Jones lowered its rating on the U.S. to AA from AA+. It stripped the U.S. of a top AAA rating in July 2011. Read more here...

Here we go again. Obama is about to get our credit rating downgraded a second time.

President Obama's big spending ways, anti-business stance and record deficits are about to get our credit rating downgraded for an unprecedented second time. Obama is leading us down the path of the European social democracies. We know how that is working out for Greece,Portugal and Italy to mention a few.

(Bloomberg) — The U.S., lacking a plan to contain $1 trillion deficits, faces the prospect of another rating cut in six to 24 months depending on the outcome of November elections, according to John Chambers of Standard & Poor’s.

America has had an AA+ rating with a negative outlook since Aug. 5 when the New York-based unit of McGraw-Hill Cos. stripped the nation of its AAA ranking for the first time, citing the government’s failure to agree on a path to reduce deficits. The U.S. has a one-in-three chance of another downgrade, Chamber said today during an S&P sponsored Webcast.

“What the U.S. needs is not so much a short-term fiscal tightening, but it has to have a credible medium-term fiscal plan,” said Chambers, managing director of sovereign ratings. “That is going to have to say something about entitlements, and that is probably going to have to say something about revenues.”

Bond investors ignored the downgrade, driving Treasury yields to the lowest levels in history, amid concern the U.S. economy was stalling and as Europe’s debt crisis intensified. Treasuries have returned 3.9 percent since the rating cut and gained 9.8 percent last year, the debt’s best performance since 2008, according to Bank of America Merrill Lynch index data.

“I don’t think anything is going to happen between now and the election in November,” Chambers said.

Keep on reading…

Meet The First President Ever To Get U.S. Debt Downgraded from AAA To AA

Guess who!

The only plan that would have prevented this downgrade was Cut, Cap and Balance. The House passed the bill, but Harry Reid killed it in the Senate.

(Bloomberg) — The U.S. Federal Reserve will extend its program to purchase the nation’s debts and stabilize long- term interest rates after Standard & Poor’s downgraded its credit rating, according to an adviser to China’s central bank.

The Fed will roll out quantitative easing 3, a tactic to purchase treasuries, Li Daokui, an adviser to the People’s Bank of China, wrote in his microblog weibo.com. Institutional investors will be forced to sell long-term U.S. debt, which may cause financial turbulence, he wrote.

S&P lowered the U.S. rating one level to AA+ from AAA for the first time yesterday while keeping the outlook at “negative,” citing the nation’s political process and criticizing lawmakers for failing to cut spending enough to reduce record budget deficits. The rating may be cut to AA within two years if spending reductions are lower than agreed to, said the New York-based rating firm.

The U.S. must address its “structural debt problems” and ensure the safety of China’s dollar assets, the state-run Xinhua News Agency said in a commentary today. China is the biggest holder of U.S. debts.