Self-explaining. Changing the outlook isn't enough.
1,000
3.00It's happened once, ever, in the last debt ceiling crisis: https://en.wikipedia.org/wiki/United_States_federal_government_credit-rating_downgrades
@BenjaminIkuta The last time they downgraded the debt it was because of debt ceiling shenaningans, this year looks like there might be more/worse debt ceiling shenanigans, therefore they might do it again. Not a particularly well analyzed take but that's my assumption of the reasoning
@ForrestTaylor totally that's why I created this market. But 25% when the U.S. debt isn't AAA anymore? Wow
@MP IDK how much worse AA is than AA+. I mean, 25% chance that S&P thinks that the US debt is the same rating as the UK or EU's? That doesn't seem that out of whack to me, but I'm not knowledgeable about the subject. I assume other people also aren't. I mean this market only has one YES trader that isn't a bot, too...
@ForrestTaylor http://www.worldgovernmentbonds.com/sovereign-cds/
Germany is AAA and has a 0.06% probability of default per year according to market measures
Austria is AA+ and has a 0.07% probability
France is AA and has a 0.2% probability
Right now, the US is AA+ and has a 0.35% probability, very high for the rating.
I think I can understand the 25% probability of a downgrade now
@ForrestTaylor Yeah, that's what I was thinking. Nothing new, really, but with the debt already having been downgraded. It would have to be much worse now for it to be downgraded even further, right?
@BenjaminIkuta You're right for S&P. But Moody's downgraded from AAA to AA+ in the last crisis, and later upgraded back to AAA. If they downgrade again to AA+ that would count.