SP is saying that the fight over raising the ceiling and the prospect of reaching future agreements was less likely than they expected. They were surprised at the difficulty in raising revenues and prospects of taking the debt down based on cuts alone.
<SP quote> "We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade."
The formerly overbght TLT should drop, the TBT (lower price) should go up twice as much as the drop in the TLT, the TBT was up over 5 percent today, the USDollar should drop, and a drop in the dollar is usually good for: