All news channels reporting WH expects down grade perhaps as soon as this weekend. It still blows my mind they (S&P) keep running up the hill to report to the WH. WTF with that? Some so called market experts think it's already baked into the market but way the markets been I really doubt it. Monday maybe more market shock. The thin traded after market had IVR off .40. Just really sucks being long anything right now.
Obama and the Democrats have managed to do what no foreign enemy has been able to do, destroy the American economy withtheir kensian economis policy of spending. Their stubborn refusal to address the real issues in our spending such as Medicare, Social Security and now Obamacare has jeapordized the very programs and people that they profess to want to help the elderly and poor. What do these geniouses in the White House and Congress think will happen when the governmnet has top pay higher interest on its bonds. The deficit will grow at a higher rate than before.
They downgraded based on the smaller value of the agreement AND ability of Congress and the President to agree.
•We have lowered our long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA' and affirmed the 'A-1+' short-term rating.
•We have also removed both the short- and long-term ratings from CreditWatch negative.
•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.
•More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.
•Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government's debt dynamics any time soon.
•The outlook on the long-term rating is negative. We could lower the long-term rating to 'AA' within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.
I hardly think Standard and Poors can be critized for the downgrade, they stated over and over again what they were looking for in debt reduction, and the fools who reign supreme in DC did not come close.
Most likely to be affected one would think would be the long bonds, such as the TLT which had been on a tear of late and closed well of the highs of the day.
Better to release the news on a Friday after the close.