Moodys: Westchester among communities in jeopardy of a downgrade

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Westchester County is among 162 governments in 31 states that Moody’s Investors Service is considering downgrading its Aaa bond rating if the federal government doesn’t reach a deal on the debt ceiling.
Moodys last night announced that governments such as Westchester with “high economic dependence on federal activity, would be vulnerable” if the U.S. government gets its rating lowered.

Westchester County spokesman Ned McCormack said this step by Moodys “is the result of Washington’s inability to resolve the debt ceiling issue and underscores the need for timely action by national lawmakers.”

“Our hope is that a debt ceiling agreement will be reached before this action by Moody’s has a negative impact on Westchester County’s Aaa rating and borrowing costs,” he said.

Though Westchester is the only entity in New York, others include Bergen, Monmouth, Morris and Union counties in New Jersey while Fairfield, Greenwich, Ridgefield, New Canaan are among towns and cities in Connecticut that could be downgraded.

If the federal government were to default, these governments would then be placed under review, which would take approximately 90 days to  complete, Moodys said today.

Some 400 other Aaa public agencies were not put on review for possible downgrades because Moodys considers their ratings to be “resilient to a one-notch downgrade” of the federal government.

Moodys earlier in the week lowered Westchester’s outlook to negative from stable, but the county retained its Aaa rating from all three agencies — including Fitch and Standard & Poors.

The changed outlook basically means the agency is  telling Westchester that it’s straddling a line that could jeopardize its financial footing — and Aaa rating.

If Westchester was downgraded, it would have to pay more for borrowing.

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4 Comments

  1. smartporpoise on

    Moody’s and all these other ratings agencies should have been disbanded and totally reorganized and a few of the top charlatans thrown in jail after they gave top ratings to numerous companies like Enron and to all the banks’ and investment houses’ bogus CDOs and other palpably shaky instruments that brought the economy to its knees. How soon we forget.

  2. just the facts on

    never the less they are the ratings agencies that in the end make the determination
    and so whether they were wrong in the past is not relevant..what is relevant is that
    a group of 60- freshman know nothing legislators whose math skills are clearly
    challenged are holding the american economy hostage to their partisan and inflexible
    ideology which might cause a financial debacle..in 1929 the market crashed much as
    it did in 2008..but then it came back much as it did in 2010….however then it went
    down again and stayed down until world war II..and the primary reason it went down
    was because roosevelt was convinced NOT TO SPEND FEDERAL DOLLARS…ie he
    tightened which is what simply cutting spending would do…this is not a novel by
    ayn rand…this is the real world..I personally don’t care because I am fully protected against
    any possible outcome..but I fear for the great majority of americans who have already
    lost half the value of their biggest asset their homes, half of their 401k’sand who are
    up to their ears in debt…higher interest rates for them means disaster..higher costs
    of mortgages puts the housing market further in the tank….what the tea party is
    doing is totally irresponsible considering that most of the deficit was acumulated during
    the time when republcians controlled the house the senate and the presidency

  3. smartporpoise on

    As usual, you’re half right, literally and figuratively. The inevitable tsunami of inflation caused by the explosion of federal spending (e.g.: printing funny money) is just around the corner and therein contains your “higher interest rates…means disaster.”

  4. just the facts on

    http://www.cnn.com/2011/OPINION/08/01/frum.debt.republicans/index.html?hpt=po_t2

    the tea party is compromising the nation…both domestically and globally….we need
    to deal with unemployment which is almost as high as it was in the depresseion..
    republicans should not be wanting at this point in time to cut spending so drastically
    that the economy cannot recover…..the consumers who normall drive economic growth
    are not there….there are no jobs…the seniors who ordinarily get 5-6% on their savings
    and spend it..are not there interest rates are at historic lows…many economists believe
    that cutting spending in the middle of an economic downturn is counter productive…we
    will see whether austerity is the cure..or the disease