In Mr. Rogers Neighborhood, We're No Longer The Best House On The Block

The house is crumbling from the foundation in this neighborhood. Noted investor Jim Rogers has said that the U.S. has already lost its prestigious AAA credit rating, and as such, Rogers is short the U.S. bond market, and has been short since June 10. Rogers was interviewed by the Wall Street Journal and said, "the US has already lost its AAA status. Who cares what Moody's say." He went on to say, "The market looks ahead: this is not the first time that the market has dealt with the fact that the US is bankrupt." As for his proclivity to buy long term US debt: "I wouldn't lend money to the US in US dollars for 30 years at 3%, or 4%, or 5% or you name the interest rate.... I shorted it June 10. I am short the US bond market as we speak." We have had concerns since the beginning of the year that the debt ceiling would need to be raised or we would not be able to pay our debts. Concerns really ratcheted up last month when it became obvious that Congress was not going to do anything anytime soon. A deal was supposed to have been done by this weekend with regards to the debt ceiling and the deficit reduction, and nothing was done. Equity markets and all asset classes in general had muted reactions, all falling less than 1%. Rogers is right. In the minds of plenty of investors, the U.S. has lost its AAA credit rating, and is slowly losing its credibility as well. Egan-Jones already downgraded the credit rating, but no one really cared when it happened. It happened last week, and the market reaction was nil. There is a lot of pessimism, either through social media, blogs, TV, and other forms of media about the U.S. government and its ability to get a deal done. President Obama, Speaker John Boehner, Eric Cantor, Harry Reid and Nancy Pelosi are as popular right now as a group of dead fish. They both smell awful and no one wants them around at all. The best house in Mr. Rogers neighborhood is slowly starting to crumble. Where are you going to be when/if the foundation cracks and it all comes crashing down. ACTION ITEMS:

Bullish:
Traders who want to emulate the legendary investor's positions might want to consider the following trades:

• Go long commodities. Rogers is long all kinds of commodities, from rice to silver and everything in between. Investors could piggyback with him using PowerShares DB Agriculture Fund DBA, PowerShares DB Com Indx Trckng Fund ETF DBC as well.

• Also consider precious metal related equities and ETFs. Consider names like Silver Wheaton SLW, ETFS Silver Trust SIVR, iShares Silver Trust ETF SLV and ProShares Ultra Silver ETF AGQ.

Bearish:
Traders who believe that Rogers is right may consider alternate positions:

• He is short NASDAQ stocks, and now, the U.S. Treasury market. Investors could mimic these trades with the ProShares UltraShort QQQ ETF QID, and the ProShares UltraShort 20+ Year Trea ETF TBT. Rogers is also very bearish on the U.S. Dollar. Investors could buy the PowerShares DB US Dollar Index Bearish UDN if they agree with him.

Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.