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Fitch downgrade of US debt is more of an indictment of the dysfunction in Washington than a real worry about the credit worthiness of the US.

On Tuesday, Fitch became the latest credit ratings agency to downgrade US debt below the pristine AAA level.  In doing so, it leaves only Moody’s as the last firm holding US debt in such high regard.  This leaves Germany, Denmark, Netherlands, Sweden, Norway, Switzerland, Luxembourg, Singapore, and Australia as the countries rated AAA by all three rating agencies (Canada is rated AAA by two).

While the stocks and bonds traded lower on the day, the reaction was relatively muted compared to S&P’s downgrade in 2011 when stocks were down between 5 – 7%.  The market’s reaction is all you need to see to realize this move is more symbolic than anything else.  Fitch cited reasons like “fiscal deterioration” and a “growing general level of government debt burden” as the basis for their decision.  But the two points that really stuck out were the “erosion of governance” relative to the other AAA rated countries and “repeated debt limit standoffs”.  They essentially pointed the finger right at Congress and said get your act together or you’re going to have a problem.

We all know that in Washington, if it’s not today’s problem, then why worry.  The market seems to only be reinforcing that behavior.  Let the blame game begin.  After all, the 2024 election is only 459 days away.  As always, our job is to separate the news from the noise as it pertains to the markets.  For now, we’ll put this one in the noise category and stay focused on what really matters to building our client’s wealth.

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At Legacy Trust we have established policies and practices that respect the financial privacy of all individuals who use our trust company. We believe it is critical to comply with the laws and regulations designed to secure your financial privacy. Your relationship with us as our client is very important to us, and we want you to understand our policies and practices about handling your information.

This Policy applies to you – This Policy applies to our relationships with individual clients who inquire about or obtain products or services from us for personal, family and household purposes.

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We have established procedures so that the financial information we collect is accurate, current and complete. We are committed to work with you to promptly correct any inaccurate information.

Our selective sharing of information – In order for us to provide investment management and other services to you, we do disclose your personal information in very limited instances, which include:

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Important Information About Procedures For Opening A New Account

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account.

What this means for you: When you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.

We apologize for any inconvenience this may cause; however, federal law prohibits us from waiving these requirements.

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