Fitch’s outlook on the U.S., which it still assigns its top AAA grade, reflects declining confidence that timely fiscal measures necessary to place U.S. public finances on a sustainable path will be forthcoming, the company said in a statement today. Standard & Poor’s and Moody’s Investors Service said Nov. 21 that the so-called supercommittee’s inability to reach an agreement didn’t merit a downgrade because the inaction will trigger $1.2 trillion in automatic spending cuts...“In terms of additional information, a Fitch negative outlook doesn’t seem that significant,” Guy LeBas, chief fixed- income strategist at Janney Montgomery Scott LLC in Philadelphia, said before the announcement. “A negative outlook from Fitch just adds one more voice to the chorus of a slowly deteriorating U.S. fiscal situation.” [Bloomberg]
Fitch Has Something To Say About Fudgie
"Manageable" but "raises questions." Fitch Ratings has downgraded JPMorgan Chase & Co.'s (JPM) Long-term Issuer Default Rating (IDR) to 'A+' from 'AA-' and its Short-term IDR to 'F1' from 'F1+'. Fitch has placed all parent and subsidiary long-term ratings on Rating Watch Negative. Fitch has also downgraded JPM's viability rating (VR) to 'a+' from 'aa-' and placed it on Rating Watch Negative. In addition, Fitch affirmed JPM's '1' support rating and 'A' support rating floor. The rating actions follow JPM's disclosure yesterday of a $2 billion trading loss on its synthetic credit positions in its Chief Investment Office (CIO). The positions were intended to hedge JPM's overall credit exposure, particularly during periods of credit stress. Fitch views the size of loss as manageable. That said, the magnitude of the loss and ongoing nature of these positions implies a lack of liquidity. It also raises questions regarding JPM's risk appetite, risk management framework, practices and oversight; all key credit factors. Fitch believes the potential reputational risk and risk governance issues raised at JPM are no longer consistent with an 'AA-' rating. Fitch Cuts JPMorgan Ratings [Reuters]
Fitch: Wells Fargo Should've Pulled A Goldman And Screwed People Over In An Esoteric Fashion
Remember this for next time.