00:00Moody's has cut America's credit rating for the first time since 1917, from AAA to AA1,
00:08below Australia's credit rating.
00:10The United States has held on to its AAA rating through the post-First World War recession,
00:16the Great Depression, World War II, Korean War, Vietnam War, the oil crisis of the 70s,
00:21the dot-com bust, the GFC and the pandemic, but it couldn't survive the Trump administration's
00:262025 budget, with big tax cuts to be offset by spending cuts.
00:32Moody's says it doesn't believe the spending cuts.
00:35Treasury Secretary Scott Bessent says, who cares?
00:38Qatar doesn't, Saudi doesn't, UAE doesn't.
00:41Markets will probably care more than Qatar.
00:44The US share market closed higher before the Moody's announcement, but the US dollar fell
00:48a bit afterwards and the interest rate on US bonds rose and Asian markets went down.
00:54The local share market fell 0.6% because of some spirited selling of globally-focused
00:58stocks like Macquarie, BHP and Woodside, and that followed falls in the prices of iron,
01:03ore-based metals and gold, although crude oil went up.
01:07And the Aussie dollar is trading roughly steady at 64 US cents.
01:12Ahead of tomorrow's interest rate announcement, here's a graph of house price gains in the two
01:16years after the start of the previous ten rate-cut cycles.
01:20Now, the least was 5%, the most 60% after 1998, and the average, 20%.
01:27Now, Coatality has produced some graphs of the percentage of houses worth more than a
01:32million dollars.
01:33Nationally, it's a bit more than a third and there's likely to be a lot more in two years
01:38after four or five rate cuts, but check out Melbourne and Sydney.
01:42The percentage of million-dollar houses in Sydney is twice what it is in Melbourne.
01:46And that's finance.
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