The David McWilliams Podcast The Moody Blues: No More Finance Bros in LA
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May 22, 2025 Moody’s recent downgrade of the U.S. credit rating raises eyebrows about America’s debt issues and unsustainable growth. In Ireland, collapsing cottages owned by those lobbying for housing reform highlight a troubling disconnect. The episode delves into how property has transformed from a social good into a parasitic entity. Discussions link Donald Trump's inflationary tariffs with the Irish government's failures in urban accountability. Listeners also hear about proposed financial strategies and a new Podcast Book Club initiative.
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US Debt Downgrade Signals Crisis
- Moody's downgraded the US credit rating from AAA to AA1 due to unsustainable debt and growing deficits.
- US interest payments now exceed military spending, signalling serious financial stress despite dollar reserve status.
How Rating Agencies Operate
- Rating agencies assess debt dynamics, deficits, currency strength, and inflation to rate country creditworthiness.
- They face conflicts of interest because they are paid by debt issuers and investors looking for assurance.
Financial Fragility Amid Volatility
- Interest rate hikes and inflation fears pose a threat to highly leveraged US sectors.
- Financial markets show volatility reacting to policy noise, highlighting fragile economic conditions.
