The United States Isn’t A Top-tier Creditor, In One Map

Fitch Places United States’ ‘AAA’ on Rating Watch Negative

government on watch for a credit downgrade; Ezra argues that it makes perfect sense to downgrade America’s political system. But how does the United States stack up internationally? For that we turn to the BlackRock Investment Institute, the research arm of the giant money manager. It has created the “BlackRock Sovereign Risk Index” which aims to combine key aspects of creditworthiness of 48 countries around the world. It factors in plenty of things that have to do with the substance of different countries’ finances, such as their current debt and deficit levels, banking system strength, and exposure to debt denominated in foreign currencies. But it also adds an important layer that it calls “Willingness to Pay.” It measures the effectiveness and efficiency of governments to meet their obligations, and counts for 30 percent of the total index. Perhaps it shouldn’t be surprising after the last couple of weeks of government shutdown and debt ceiling chicanery in Washington, but by BlackRock’s reckoning, the United States is not among the top-tier credit risks by this ranking. Here’s a complete map: You can check the detailed analysis for each country in an interactive graphic here . By BlackRock’s reckoning, the world’s most creditworthy nations–those with both solid finances and solid political systems that ensure bonds will be repaid–are the likes of Norway, Singapore, and Switzerland. The United States, as the map shows, is in the second tier, more similar to South Korea and Austria and Malaysia in its creditworthiness. For anyone who follows the news, it is hard to disagree. Neil Irwin is a Washington Post columnist and the economics editor of Wonkblog.

The United States is still getting rid of its chemical weapons

While it’s unclear exactly how many chemical weapons Syria has, U.S. intelligence and other estimates put its chemical weapons stockpile at about 1,000 tons stored in dozens of sites. Syria’s chemical arsenal at a glance The storage igloos at the Utah depot where munitions were stored and the destruction facility, in the background. The United Nations has given Syria until mid-2014 to destroy that arsenal and U.N. weapons inspectors have expressed optimism that this deadline can be reached , despite having to dart in and out of battle zones amid Syria’s bloody civil war. Wade Mathews, who once worked on the U.S. project to destroy its chemical stockpile, isn’t so sure that Syria can meet that deadline. He said the U.S. effort took billions of dollars, the cooperation of many levels of government — including the military — and a safe environment to make sure the destruction was done safely. “We had a coordinated effort, we had a government that insisted that it be done safely and that the community was protected,” said Mathews, who now works with the Tooele County emergency management team, which makes sure the Utah community is aware of the project. “I don’t think those things are in place in Syria.” Mathews briefly worked at the Desert Army Chemical Depot in Tooele, a desert town bracketed by mountains outside of Salt Lake City where 43% of the nation’s chemical weapons were once stored. The rest was stored at eight other sites around the country.

The fans at Estadio Rommel Fernandez in Panama City were ready to start a nationwide celebration. And then the Americans stunned not just an opponent, but an entire country. Graham Zusi and Aron Johannsson scored in second-half stoppage time, and the United States rallied for a 3-2 win that left Mexicos World Cup hopes alive and knocked out the Panamanians. It shows you how brutal football can be. For one side thats almost there, and then the other side is back in, U.S. coach Jurgen Klinsmann said. Now obviously you feel for the people. You feel for an entire country. The U.S., which clinched a World Cup berth last month, didnt use most of its regular starters, and Gabriel Torres put Panama ahead in the 18th minute in a downpour. Michael Orozco tied it the 64th minute, just as Costa Rica took a 2-1 lead at home against Mexico. Luis Tejada scored in the 83rd, putting Panama back into fourth place and the playoff berth. Mexico, which last missed the World Cup in 1990, would have been eliminated, and the Panamanians would have kept alive their chance to reach the World Cup for the first time.

United States rallies to beat Panama, saves Mexico’s World Cups hopes

The U.S. is the most heavily indebted ‘AAA’ rated sovereign, with a gross debt ratio equivalent to double that of the ‘AAA’ median. RATING SENSITIVITIES The RWN reflects the following risk factors that may individually or collectively result in a downgrade of the ratings: – Failure by the government to honour interest and/or principal payments on the due date of U.S. Treasury securities would lead Fitch to downgrade the U.S. sovereign IDR to ‘Restricted Default’ (RD) until the default event was cured. We would also downgrade the rating of the affected issue(s) to ‘B+’ from ‘AAA’, the highest rating for securities in default in expectation of full or near-full recovery. Debt securities approaching maturity or those with approaching coupon payments would be vulnerable to a downgrade. The Country Ceiling would likely remain ‘AAA’. In the event of a deal to raise the debt ceiling and to resolve the government shutdown, which Fitch expects, the outcome of a subsequent review of the ratings would take into account the manner and duration of the agreement and the perceived risk of a similar episode occurring in the future. It would also reflect Fitch’s assessment of the following main factors: – The impact of the debt ceiling brinkmanship and government shutdown on our assessment of the effectiveness of government and political institutions, the coherence and credibility of economic policy, the potential long-term impact on the U.S. sovereign’s cost of funding and cost of capital for the economy as a whole, and the implications for long-term growth. – Our assessment of the prospects for further deficit-reduction measures in future years necessary to contain government deficits in the face of long-term spending pressures and place public debt on a downward path over the medium to long term. KEY ASSUMPTIONS Fitch continues to believe that an agreement will be reached to end the current political impasse and raise the U.S. debt ceiling. Even if the debt limit is not raised before or shortly after 17 October, we assume there is sufficient political will and capacity to ensure that Treasury securities will continue to be honoured in full and on time.