Microsoft has higher credit rating than U.S. government

Microsoft has higher credit rating than U.S. government

Summary: Microsoft now has a higher credit rating than the U.S. government, since its downgrading late last week.

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For the first time in its history, the United States last week lost its AAA credit rating from Standard and Poor, an internationally recognised credit rating organisation.

The U.S. government's ability to handle the recent threat to default is one of many reasons why the credit agency lowered its rating to AA+, putting the United States below the United Kingdom, Germany, France and sixteen other countries.

Yet, Microsoft is one of four U.S. based companies which still holds onto its AAA rating, with the exception of some financial and government institutions, despite the government's lack of ability in holding onto its own.

In 2008, Standard and Poor gave Microsoft the highest status for credit rating, beating other high profile companies like Apple, Google and Amazon.

On the other hand, last week it was revealed that Apple -- the company behind the Mac and the world famous iPod line -- had more cash and marketable securities in reserve than the U.S. government, as the debt crisis escalated.

Apple was said to have had $76.4 billion, while at the time, the U.S. government had just shy of that, with an operating cash balance of $73.7 billion.

Apple's reserves would have been "enough to buy Goldman Sachs or Facebook", hypothesised The Atlantic.

For now, though Standard and Poor has downgraded the U.S.' credit rating, two other credit rating agencies still classify the economy in AAA status -- at least, for now.

The U.S. House of Representatives and Senate eventually passed the new laws, allowing the government to raise the debt ceiling to pay its bills on time.

Other companies still with AAA rating include Exxon Mobile, Johnson & Johnson, and Automatic Data Processing.

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  • "Whoever issueing bond in US$ should be downgraded"

    As US government has to either tax these Corps to death or debase the US$ to cover the mega pile of debt, every US corporate bond becomes risky now. Listen to the real smart investor Peter Schiff's take on what it means for US to be downgraded.

    http://www.youtube.com/watch?v=SgNLTb58K_Y&feature=player_embedded#at=479
    LBiege
    • RE: Microsoft has higher credit rating than U.S. government

      @LBiege Peter Schiff is a fringe individual whose father is in prison for being one of the "you don't have to pay taxes" folks and the apple hasn't fallen far from the tree.

      Real economists laugh at Mr. Schiff and his constant warnings of economic apocalypse; we're still waiting for his hyperinflation.
      http://www.youtube.com/watch?v=fkQsGnrVvRQ&list=FL65HEiElWMe8&index=2
      jgm@...
      • RE: Microsoft has higher credit rating than U.S. government

        @jgm@... I don't know this Peter Schiff but I wouldn't bet against anything with the economy these days.
        slickjim
      • One hair of Peter Schiff has more Econ IQ than ...

        all the so-called mainstream "real economists" fools you could find and put together, trust me.
        LBiege
      • RE: Microsoft has higher credit rating than U.S. government

        @jgm

        Bob Pollen doesn't get federal finance. He fails to see that about 29% of US govt debt outstanding matures annually and must get rolled over -- that's $4.2 TRILLION each year, even though current interest due on the debt runs about 22.3% of revenues.

        Do the math. Current rev is about $1.7 T/yr. Govt cannot re-fi $4.2T of maturing debt from current rev, forcing debt roller over. Without rollover, it's game over. Cutting spending to $0 still doesn't cover roll over.

        Any rise in market rates for US Treasury paper makes the expense of roll over higher.


        Bob Pollen is a fringe economist at a two-bit farmer's college, U Mass.
        FasterDude
  • RE: Microsoft has higher credit rating than U.S. government

    I'm pretty sure anyone has a higher credit rating than the US does right now. Even the guy who never pays on time.
    The one and only, Cylon Centurion
  • Of course.

    Billions of people and most governments are still locked-in to Microsoft products just as they are with the US dollar (for now). Alternatives to the US dollar is starting and will pick up pace. In addition, the US government is now a slave of the corporate sector, and Microsoft is just one of those many companies and financial institutions. People? 'The people are there to give us da money'.
    root12
    • RE: Microsoft has higher credit rating than U.S. government

      @root12

      The United States of America: Of the corporations, by the corporations, for the corporations. The destruction of the middle-class is well under way. The elitist upper echelon has resented for decades having to compete with the lower classes for jobs that were once their private domain.

      What amazes me even more is how people vote against their own best interests.
      gtdworak
      • Wrong enemy friend.

        @gtdworak . Corporations are only taking advantage of the laws created by the politicians being bought. Cannot blame them for the competitive advantages they buy.
        People
  • RE: Microsoft has higher credit rating than U.S. government

    Not true. Microsoft will be downgraded too, being based in US.
    tbjerret
    • RE: Microsoft has higher credit rating than U.S. government

      @tbjerret

      If Microsoft has to move to another country to benefit themselves and prevent going down with the USA then they will do that (might not be in the next few years but it will happen eventually).
      josh92
      • I disagree.

        @josh92
        Microsoft would not risk the lucrative US market on saving a few dollars on taxes.
        Tim Cook
  • Very troubling

    We have here:<br>1) A runaway Federal Budget Deficit<br>2) A looming Trade Deficit<br>3) A Treasury Bond Market mostly controlled by China<br>4) China manipulating currency pricing<br>5) Free Trade that isn't Free, see item 2<br>6) NAFTA designed to enrich a few and empoverish millions of Americans<br>7) CAFTA, the same as 6<br>8) An intransigent grid-lock in Government where nothing gets done<br><br>We are, economically speaking, standing on a busy street corner with our trousers dropped; it's only a matter of time until someone walks by and kicks us where it hurts.<br><br>What can we do?<br><br>1) Rescind NAFTA, CAFTA<br>2) Divest ourselves from participation in the WTO<br>3) Form a coalition to enact needed legislation, a party that gets things done<br>4) Establish a Mandate that the U.S. be self-sufficient as a matter of National Security and survival.<br>5) Begin a 5-10 year plan to create a National Manufacturer Incubator Project Federally subsidized, much as is done for Farming<br>6) Begin a graduated 5-10 year plan to establish an Industry Sector-targeted Tariff on imports to the US on goods from countries that are holding the largest 10 trade deficits. <br>7) Funnel Tariffs into a Treasury Fund in escrow for (see item 5 above) Mandated Manufacturing Incubator Project.<br>8) Send financial offsets to Manufacturers participating in the MIP project to offset their ramp up and scaling costs.<br>9) Eliminate off-shore labor tax sheltering mechanisms over a 5 year phase-out<br>10) Make outsourcing any American job a criminal offense.<br><br>When MIP actually gets underway, jobs will return, cash flows will be generated and trickle down the US Economy instead of outflows to China and other trade deficit countries. We will need to enforce a Federal Balanced Budget and reduce the size of Government at the same time. <br><br><br>It won't happen overnight, but we Americans need to knuckle under and make hard decisions or the progression of bad news will only turn to worse.<br><br>God Bless America.

    ==============
    P.S.
    See why Andy Upgrove feels strongly about tariffs:
    h-t-t-p://www.businessweek.com/magazine/content/10_28/b4186048358596.htm
    Dietrich T. Schmitz, Your Linux Advocate!
    • $3 Billion in hedge fund manager bonuses don't hurt either.

      @Dietrich T. Schmitz, Your Linux Advocate!

      $3 billion dollars = 33.04 tons of $100 dollar bills..

      Interesting how someone could know to short the stock market on the day it lost over $800. A coworker came to me in the lunch room and was bragging how he shorted the market and made a killing. <b>It would be interesting to know who paid the bonuses and how much they made for destroying the economy</b>. Causing the financial collapse and shorting the market is no different than what other traitors did throughout history.

      The academic community has it pretty well figured out.

      http://www.youtube.com/watch?v=qOP2V_np2c0
      Joe.Smetona
      • Thanks Joe. You are always thoughtful.

        @Joe.Smetona

        nt
        Dietrich T. Schmitz, Your Linux Advocate!
      • So you blame this on Microsoft

        @Joe.Smetona
        as usual?
        Tim Cook
    • RE: Microsoft has higher credit rating than U.S. government

      @Dietrich T. Schmitz, Your Linux Advocate!

      You're spewing common sense, something alien to our elected officials in Washington. Politicians are interested in one thing and one thing only, getting re-elected. They stopped caring for their constituents a long time ago. Their addicted to corporate money which funds their elections. And to receive that funding, they have appease their corporate puppet masters while pretending to care for the people they represent.
      gtdworak
    • RE: Microsoft has higher credit rating than U.S. government

      @Dietrich T. Schmitz, Your Linux Advocate!

      Whether what you advocate is a good idea or not I can't say because I"m not as into politics and policy as you clearly are but I can say with near absolute certainty that what you advocate will not come to pass. Change is gradual (and usually for the worse). And when radical change happens it's only because one's back is against the wall, and that kind of pressure and lack of forethought is not at all conducive to an intelligent plan/reaction to the crisis. A panicked response is never an intelligent/effective one. The USA is doomed (although it will probably live on in name, though it will be near unrecognizable to the USA of the past 60-70 years).
      josh92
      • Common sense has not been heard in Washington

        @josh92
        In case you hadn't noticed, our backs *are* up against the wall. Where have you been?

        And, we have neglected our own back yard going on 30 years.

        This is your morning wake-up call...
        Dietrich T. Schmitz, Your Linux Advocate!
      • RE: Microsoft has higher credit rating than U.S. government

        @josh92 May be you should tell someone that in congress
        Knowles2