A quadruple-A rating

“In Omaha, the U.S. is still triple-A. In fact, if there were a quadruple-A rating, I’d give the U.S. that,” he(Buffett) told Fox Business News.

Yes folks, there is such a thing. The oft venerated and impossibly elusive “Quadruple A” rating. Some thought it went the way of the unicorn and coelacanth but the Oracle of Omaha is here to tell us that it should make a comeback and the US should be first on the list. We’d venture to think this quote is wishful thinking on Warren’s part. He does have a sizable derivatives book(~20 billion notional) tied to HY indexes (benchmark surged 150 bps just this first week in August) and Muni issuers. Both of which aren’t taking too kindly to the US downgrade.

There’s not much else to say about this so We’ll leave you with this thought…Whether you agree(cough, cough, White House) with Warren or not(cough, cough, everyone living in reality) buying US government debt is a tough case to make right now. Interest rates are artificially low and the dollar is being debased.

For bond holders this is like being kicked in the shins and then being kicked in the nuts. We’ll keep our shins and nuts intact, thank you very much.


2 Responses to A quadruple-A rating

  1. 1689capital says:


    that was quick. S&P is on a war path and we’d like to congratulate them(better late then never). According to the latest quarterly report this shouldn’t effect the derivatives book but can be seen as commentary on what the derivatives book means and contains.

    “As of June 30, 2011, had Berkshire’s credit ratings (currently AA+ from Standard & Poor’s and Aa2 from Moody’s) been downgraded below either A- by Standard & Poor’s or A3 by Moody’s an additional $1.1 billion would have been required to be posted as collateral.”

  2. hotshot bald cop says:

    By no means considered it that way.

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