S&P Downgrades U.S. Credit Rating
Standard & Poor’s announced this evening [Aug.5] that it has downgraded the U.S. credit rating, the first time the U.S has been downgraded since being awarded the top credit ranking by the New York-based company in 1941.
“The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics,” S&P said in a statement [here – PDF]
The BBC said: “S&P had threatened the downgrade if the US could not agree to cut its federal debt by at least $4 trillion over the next decade. Instead, the bill passed by Congress on Tuesday envisages $2.1tn in savings over 10 years.”
The Wall Street Journal reported that: “Some investors believe Treasurys will remain a safe haven in a volatile world, even without a solid triple-A credit-rating.”
“Others believe the U.S. will be forced to pay higher interest rates, say about 0.5 percentage point higher, simply because they are seen as being slightly riskier than before.”
“While only a slight gain, such a jump would increase the cost of a wide array of debt, from a home mortgage to the trillions carried by the U.S. government itself.”
CNN said: “The announcement came on a day when financial anxiety gripped the globe. Stock markets worldwide saw intense volatility amid worries of a widening debt crisis in Europe and a stalled economic recovery in the United States.”
“Stock market values fell across Asia and Europe on Friday. U.S. markets were dramatically up and down a day after having their worst day since the 2008 financial crisis.”
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- Standard & Poor’s Downgrades Bermuda Rating | Bernews.com | May 19, 2014
Our esteemed Premier has placed this fragile economy called Bermuda in the hands of these very same credit ratings agencies , and our ability to borrow money is contingent upon the report card we receive from these faceless entities , Scary Bermuda … Very scary . We didn’t need to be so reliant If carelessness wasn’t the operating model during the Brown administration . DrEB dragged this Island down to a horrible low of which it will take many years to recover .