Standards and Poors

The S&P Debt Downgrade: What It Means

EisenhowerOriginally published by OpEd News.

On Friday, August 5, the credit rating agency, Standard & Poor's, downgraded US debt from AAA to AA+.

Gerald Celente's view that S&P's downgrade of the US Treasury's credit rating reflects a loss of confidence in the political system was confirmed by the rating agency itself. S&P explained the downgrade as the result of heightened political risks, not economic ones. The game of chicken over the debt ceiling increase and the GOP's ability to block tax increases indicate that "America's governance and policymaking is becoming less stable, less effective, and less predictable"

The reduction in the government's credit rating to AA+ from AAA is a cosmetic change. It remains a very high investment grade rating and is unlikely to have any effect on interest rates. It is revealing that despite the downgrade, US bond prices rose. It was stocks that fell. The financial press is blaming the stock market decline on the bond downgrade. However, stocks are falling because the economy is falling. Too many jobs have been moved offshore.

Decline and Fall - Why Would Anybody Believe Standard and Poor's?

Michael Collins
We are in the midst of a bum's rush - the quick eviction of a less than desirable in an unpleasantly abrupt fashion. The problem is we're the bums. Our eviction from the political process is all based the word of a firm that helped fuel the housing bubble, trigger the financial collapse, and found itself indicted by the State of Connecticut for "unfair, deceptive, and illegal business practices" in 2008.