It had to happen sooner or later. The Dagong Global Credit Rating Company, a Chinese "credit agency," has issued a downgrade rating for U.S. sovereign debt. That's quite a gutsy move for an upstart.
U.S. institutional investors are likely to laugh off this move as meaningless since Dagong's application to become an NRSRO is still pending with the SEC. It needs that accreditation to be taken seriously with U.S. investors.
I'm not sure whether this would have happened without the express approval of China's ruling elite (the nouveau riche in the Central Committee of the Communist Party of China). Is Dagong truly a pure entrepreneurial effort? Or is it a stalking horse in the ongoing slow-motion attempt by Chinese elites to build a case for the Middle Kingdom's displacement of the U.S.? I'm merely a spectator.
Full disclosure: Long FXI with covered calls and cash-covered puts.
U.S. institutional investors are likely to laugh off this move as meaningless since Dagong's application to become an NRSRO is still pending with the SEC. It needs that accreditation to be taken seriously with U.S. investors.
I'm not sure whether this would have happened without the express approval of China's ruling elite (the nouveau riche in the Central Committee of the Communist Party of China). Is Dagong truly a pure entrepreneurial effort? Or is it a stalking horse in the ongoing slow-motion attempt by Chinese elites to build a case for the Middle Kingdom's displacement of the U.S.? I'm merely a spectator.
Full disclosure: Long FXI with covered calls and cash-covered puts.
