In Los Angeles all the loose objects in the country were collected, as if America had been tilted and everything that wasn’t tightly screwed down had slid into Southern California.
— Saul Bellow, Seize the Day
Thomas Juarez, Los Angeles’s chief investment officer and assistant treasurer spoke out against the landslide on Tuesday, dropping Standard and Poor’s from rating its portfolio because of the rating agency’s downgrade of the US sovereign.
“Quite frankly, we just don’t want to be associated with [Standard & Poor’s] anymore based on that decision. We think it was irresponsible and just excessive,” Juarez told the Bond Buyer.
The city’s investment pool was one of 73 funds downgraded because of large holdings of US Treasruies.
Sure, the downgrade was botched. But without leaning too much on one of his city’s greatest poets, it’s perhaps worth noting that the city has around 80 per cent of its portfolio in US Treasuries and agency notes.
What did it think would happen?