that moody's downgrade from aa 2 to aa 3 he. we'll see how that affects the market nepoutlook, however, does remain stable. let's keep that in mind. the nikkei and topix trading in the positive. pretty much taking the cues from the dow and nasdaq and s&p overnight. now the u.s. markets initially got hit by some economic data in the housing sector. new home sales which yet again showed a contraction for a third month in a row with new home sales falling to a five-month low in july. there was also a rare earthquake which hit the east coast of the united states. initially causing a little bit of a dip, mostly in the insurance sector, but then all sectors pretty much rebounding very strongly into the close. hopes of a possible new set of measures -- easing measures by the federal reserve will be a focus there and that drove sentiment higher in u.s. markets. all eyes are going to be on fed chairman bernanke when he attends that meeting in jackson hole, wyoming this week. let's touch on the currency markets as well. the dollar got pin

then backed away. >> moody's did not say the same thing. when these guys go out publicly and actually say it with a press guy on the record, then you know they mean business. now, whether this has a market impact, you know, that is the big question. >> neil: here is the difference, when moody's looked at this and then they tried to walk it back. dial it back. >> nobody was more adamant than s&p. >> neil: you think because they made it 4 trillion-dollar s&p would not have done this? >> yes there is a little bit of politics in this. i think they boxed themselves in. they really don't -- didn't want to do this but the fact that they came out so heavily and said $4 trillion. >> neil: you are right. talked to s&p about this on this very show two weeks ago. here is what he said then when pushed on this very subject. >> everyone points to s&p, look at they toledo financial armageddon. does ever that come into play the potential for that? >> well, we have lowered sovereign governments with triple ratings before. >> neil: it's the united states of a

fish and moody's and s. and p. gave these cancer nations these abominations their aaa rating and it created this huge ponzi scheme now they've pulled the rug out from underneath. another story related to this financial chaos going on at the moment bank of new york mellon charges depositors america's biggest bank has been forced to start charging customers who have deposits of more than fifty million dollars as more investors take cover from the my. turmoil so they're saying that they're basically trying to force people out of cash and into somewhere else because they're receiving so many people coming in flooding the banking system with all this cash and this is something we've spoken to james turk about where he envisions reverse capital control that instead of capital controls being on money being taken out of the u.s. it would be against money being brought into the u.s. in order to avoid the hyperinflation of all those dollars that are overseas another great point trying to stop that money from coming in by cha

they said cuts or else. >> neil: moody's said the same then backed away. >> moody's did not say the same thing. when these guys go out publicly and say with it a press guy on the record then you know they mean business. whether this has a market impact that is the big question. >> neil: when moody's early on they tried to walk it back. >> nobody was more adamant than s&p. >> s&p was in this box. you think had they made it four trillion, s&p would not have done this? >> yes. there's a little politics on this i think they boxed themselves in. they didn't want to do this. the fact they came out so heavily and said if you are trillion -- >> neil: you are right. we talked to david about in. >> everyone will point to s&p, they lead to financial armageddon. does that come into play the potential for that? >> we've lowered sovereign governments with aaa ratings before. >> neil: but this is the united states of america. >> it is the u.s. we rate 1 governments. we've downgraded japan's ratings. >> neil: like i said this is the united states. >> i got it, but we take a global view. >> neil: to your

[laughter] no wonder they're so moody! [cheers and applause] you're welcome. i'll take that one.eers and applause] they are materially harming america. this is nothing more than economic terrorism. and i say we deal with them the way we deal with all terrorists. march marines to their offices, fit them for orange jumpsuits, and whisk them off to gitmo for some enhanced accounting. [laughter] a little number boarding. rough stuff, but it's the only here to tell me other ways we might save our credit rating, please welcome new york times washington bureau chief, david leonhardt. dave, thank you so much for coming. good to see you. [cheers and applause] does it really matter if we have a triple a rating? can't we let the chinese kids get the good grades and we're copy off their financial report? >> it probably matters. >> stephen: why does it matter? >> not so much because of rating but because the rating reflects a reality. we have a serious deficit. >> stephen: he we just made the hard cuts. >> we didn't make the hard cuts. >> stephen: we made the hard choice to make the hard cuts

moody's pretty much said it on friday. we are going to be downgraded.ve 5 trillion in obama debt which is going up higher in spite of this deal. the american people lose but the panic is over now. they get to play golf. the president gets to play golf go to party the and get on a normal schedule. >> part of the nightmare scenario deadline is the downgraded. they were saying that over and over and over. we are getting downgraded because they have made this problem worse over time. came into office made the sort term deficit worse. he made the long-term debt problem worse by causing unsustainable on top of the other ones. >> let me make a prediction. we will get back to the shape matter and form they are going to lose a lot of conservatives. going to get sent back to the house. get a lot of conservatives in the house as well. i assume nance pelosi will have to whip the democrats. >> they are not going to get this through without democratic votes. my sense in listening to garrett is they will fold and come before it. that is not certain to me. the longer i

the credit ratings agency moody's has confirmed the united states can keep its aaa status after the country avoid defaulting on its debt. president obama has signed into law an agreement raising the government debt limit. but moody's has assigned a negative outlook to the rating to show there is still a risk of future downgrade if the government's fiscal discipline weekends. in the past hour, china's the state news agency has said the deal has refused to diffuse the bond issue. >> there has been little to smile about in the last few weeks as the president and his opponents try to cobble together a deal. but now it is done. disaster has been averted. the president who came to power promising hope and change has been pushed into presiding over cuts. he sounds cross. >> it is likely the uncertainty surrounding the raising of the debt ceiling for businesses and consumers has been unsettling and one further impediment to full recovery. it is something we could have avoided entirely. >> america is deep in the red. with every dollar the government spends, 40 cents is borrowed money. congress puts

moody's pretty much said it on friday. we are going to be downgraded. we still have 5 trillion in obama debt which is going up higher in spite of this deal. the american people lose but the panic is over now. they get to play golf. the president gets to play golf go to party the and get on a normal schedule. >> part of the nightmare scenario deadline is the downgraded. they were saying that over and over and over. we are getting downgraded because they have made this problem worse over time. came into office made the sort term deficit worse. he made the long-term debt problem worse by causing unsustainable on top of the other ones. >> let me make a prediction. we will get back to the shape matter and form they are going to lose a lot of conservatives. going to get sent back to the house. get a lot of conservatives in the house as well. i assume nance pelosi will have to whip the democrats. >> they are not going to get this through without democratic votes. my sense in listening to garrett is they will fold and come before it. that is not certain to me.

> it's obvious that this is political pay back, we know s & p failed we know they blew it, so did moody's, and everyone else. why did the noise ratchet up on this. trying to discredit them more, as if they need to be discredited to discredit the downgrade. it seems purely political to me. >> neil: charlie, you say they take among, take months. fine, i agreed with that. >> sometimes years. >> neil: do you think had we not had the downgrade we would have had decisions within days of that. >> they haven't finished the lehman brothers investigation, that's all i can tell you and we're talking three years. i will say this, obviously the leak or whatever it was was curious, it's not going to-- they were shooting back at s & p, the government is-- >> for now they've left fitch and moody's off. >> i don't believe that. i believe they're involved. >> neil: s & p is the one that was reported. >> noi what was reported. i believe they're in it together and i will say this though, if were you going to tell me does anybody deserve to be investigated out of the 2008 financial crisis, it's s & p, moody's

the top rating agency moody's in the last 15 minutes confirmed the u.s. will keep the top-notch triple-a rating for now. however, the company downgraded the u.s. outlook, warning for government to reduce deficit in the future. this afternoon, fitch released a statement saying the risk of a government defaulting on the loans is extremely low. however, while the agreement is clearly a step in the right direction, the united states must also confront tough choices on tax and spending against a weak economic backdrop if the budget deficit and government debt is to be cut to safer levels over the medium turn. now fitch says it expects to finish the review of the u.s. rating by the end of this month. standard & poor's urged the u.s. to cut deficit with a credible plan. it's unclear if the agency will downgrade the government's rating. >> bret: moody's keeps the triple-a but gives a negative outlook. not sure what the committee, the joint committee might do down the road. >> that's right. the bill pushes a lot to the commission and still unclear if it achieves t

moody's previously had as one notch higher than s&p, so now, with the movies in adjustment -- the moody's adjustment, what that means is we are still very much on a roll with the debt. a strong aa. we noticed in the electronic markets, as we're required to do with our material disclosure, and all of our bond documents, for our build america bond revenues. president vietor: commissioner moran. vice president moran: did they state a reason for the downgrade? >> this is on a current basis as well as a projected basis. what movies does is just take them all and line them up in a row, and based on our current level of water sailors and the cumulative fund balance reserves, that made us go into the third notch of aa. vice president moran: and was the size of the balancing accounts an issue there? >> they factor in all of the cash we have available. and also noticed a long term strength of the economics. we cannot fall out of sync. the willingness of the commission to adopt the rate increases that were needed and the cost management, the efficiencies. they did give us a lot of credit strength, w

to pastry stairs and or moody's and fitch. basically half and aches on their face because of what they did in the financial crisis so. how would it be true thousand eight so what they are. what standards the poorest and empty and i mean just trying to sell which some of their integrity and reputation by making a move that is clearly i'm i feel are with their with washington ok right now we're going for the american people's arms and can just briefly what effect does this have on the an average american citizen. the mediately probably not much. but slowly if to the extent that this rating change will affect the cost of all right you know when that chills the then because the bar even the u.s. government will pass through will have a ripple effect on the consulate lowering for everybody and i think that will have a significant gantry it fair for the american economy but i am not enough of a macro economist to be able to say how when this is going to happen when the window actually takes place. for a year inside george to an expe

so, we have confidence that moody's and fitch will not downgrade. we'll see if s&p does. but independently, it is still important but it means less than if we saw, say, standard & poor's and moody's, downgrade the rating, john, and i think that is a very, very important point. at the same time i think it's important when you look at where americans have been putting their money, when they pulled out so aggressively of the market yesterday and we saw the biggest decline for stocks that we've seen since the financial crisis, where did people put their money? they put their money, interestingly, in u.s. treasuries, in government bonds, so much so that one-month t-bills were getting a negative return. people were paying the u.s. government to hold their money. if we see a downgrade, you will see a dramatic shift and people will be going away from what they thought was a flight to safety in treasuries and they will be looking for another safe haven for their money. they don't feel like that safe haven is in the stock market, if they don't feel like that with the u.s. treasurie

moody's knows japan has the largest external assets among advanced economies. it says the country will continue to get the trust of the market as long as it manages to improve its fiscal condition. >> the stable outlook reflects are believed that japan's credit strengths will prevail over the next 18 months and that the home buyers that favors low refinancing risk, low refinancing cost for jgbs will remain in place. >> but, byrne warned the agency may move to review its rating for a possible further downgrade if japan's social welfare and tax reforms are delayed. >>> for an analysis of the rating cut on japanese government bonds or jgbs, we spoke to masaaki kanno. >> basically the downgrade is a warning against the market and the government. but the government doesn't seem to care those are the warning from the market and also from the downgrading of -- by the rating agencies. because despite the downgrading, the bond yield has been lowering. so even if the government expands the fiscal deficit and increases bond issuance, the actual cost is limited. actually f

moodies has stamped a u.s.tive outlook that's being taken more seriously than that downgrade by a chinese rating agency. but moody's is still highly respected here in the u.s., even though it missed by a long shot calling the financial crisis ahead of time. adp reported that private sector employers added 114,000 jobs in july. but adp missed terribly in june, so investors aren't putting too much stock in it. they really want to wait and see what the official government jobs report says and that is coming out on friday. >> okay, allison. thanks. >>> let's head over to the white house. brianna keeler. >> reporter: we have pressed white house press secretary jay carney on this and he has said they cannot control what the debt reporting agencies do. now what we're really seeing here at the white house is a pivot to the jobs message. the president has kind of been chained to the white house, chained to washington dealing with the debt ceiling crisis and now he's moving to jobs saying you can't just grow the economy