The most important question in my mind is why - and why now - did you make this decision?
Why, we talked for some time the progressive deterioration in public finances U.S., which is not new, and it is not due to the recession. It is a process which has been unfolding for much of the last decade. And then of course, in addition, the cyclical slowdown due to the serious recession did worse. If the Administration and Congress move to address these trends, they will go to deterioration due to aging of the population - things like Medicare, Medicaid and social security.
Why now, we have taken this decision because when one looks at the highly polarized debate going on in Washington and very strong differences between Republicans and Democrats, including the Administration, about what could be done, we believe that it is unlikely that they will be able to narrow the gap, particularly on the course of the next few months. And there is no assurance, even after the 2012 election, that the two parties would be able to meet and begin to have a significant impact on what is still a rising burden of the debt of the U.S. Government. When we compare U.S. financial history with a number of other sovereigns key - level AAA - Europe and also the Canada in North America it see us Governments taking action and describing programmes to reduce their structural deficits. And the United States course, we always talk about it.
Some are characterize as draw a shot across the bow of the U.S. Government. You see it say that?
No.. The way we see it is our way to see all our credit ratings sovereign, who is to give an independent opinion of what we believe that the underlying credit trends are. We do take a position on what are good or bad policy for Governments to pursue. We analyze what we think are the implications of these choices credit. This is true to the United States and it is true with other sovereign Governments 126 we speed around the world.
How would you describe the way in which the markets have reacted?
It is early days yet. And don't forget that the step we have taken is a negative perspective. We have confirmed the AAA rating at the same time and we reminded people that means negative outlook, which means that it is at least, in our view, currently one in three chance that the rating would be lower. We also said that if we lowered the rating it would be by a single step to AA +. If in the spectrum of ratings from S & P (MHP), if this happens, it would be indicated only a very fresh credit of U.S. permanent degradation. Of course, it is also true that a sovereign credit rating AAA has special significance in General.
If you lowered the rating, what do you think that the impact would be?
I know, because we know from experience in the world, that sometimes markets that align with our opinions and sometimes not. And this is what happened in Europe over the last decade. There is an eloquent testimony to that: since many years, the market has been pricing all euros and the sovereigns, including those that we read on today as the Greece, Portugal, the Ireland and Spain, to AAA levels. In a number of these cases, we took a very different view for a long period, and the market ignored this opinion.
It is suggested that this gesture is really an attempt to regain the credibility that agencies, including yours, scoring lost by established rating mortgage-backed securities - that it is an attempt to get out in front of a problem.
There are two things to say about this. One is, it is important to actually read what we say. This is why we all have our mis research free of charge, including our sovereign research, on our public website - for people to read our analysis. If they agree with us or not, always is a good idea before reach you a conclusion to read what we say.
The second thing to say, c'est que our sovereign credit ratings performance is very strong. These ratings to continue to exercise in the manner they are intended. If you look at the retroactive to the default settings of the Government, which we have had a number over the years, particularly in the years since 15 or 20, the odds of doing the work to provide a prospective view of the risk of default.
The President and his economic adviser Austan Goolsbee and Secretary of the Treasury Geithner say there is now a focus on debt and action is in progress.
Well, we will see if this assessment is true.
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