Credit rating agencies, other than S&P, have downgraded the US already. One credit rating agency even rated the US just one notch above junk.
Tea party lawmakers say the S&P's downgrade of the US credit rating and the markets' convulsive reaction on Monday is merely confirmation that they had been right all along.
The Dow has lost 9.13 percent of its value over three days of trading. It's bad, but investors have seen much worse in previous sell-offs. Still, 'crash' versus 'correction' is a matter of debate.
The Dow plunged 634 points Monday, even as Obama sought to assure the markets that the still-gaping deficit represents a failure of politics, not of the nation's credit-worthiness.
If the Standard & Poors downgrade of US debt from AAA to AA+ worries investors enough, the US may be forced to pay higher interest on its debt, which could affect interest rates across the economy, from mortgages to car loans. But for now, economists say, the economic impact of the downgrade will likely be minimal and US Treasury bonds will continue to be the investment vehicle of choice for American and overseas investors. “Despite the drop in the rating and the fact that the US economy is going through a fiscal crisis, it’s still one of the safest places to invest,” says Farhad Saboori, an economist at Albright College in Reading, Penn. Here are five reasons why the downgrade isn’t as bad as it seems, and a reminder not to take it too lightly:
Despite the European Central Bank’s intervention today, last week's losses in the Asian and European exchanges continued, prompted by worries that Europe's debt crisis will spread.
Double-dip recession could be coming, but it doesn't have to be. As Americans are becoming fearful of a double-dip recession, lawmakers in Washington are obsessing over the wrong things.
While Italy has a fairly low budget deficit, structural issues such as low productivity have resulted in an economic crisis. Its public debt, at 118 percent of GDP, is one of the highest in Europe.
Stocks plummeted Monday, in response to the S&P's decision Friday evening to downgrade the US debt rating from AAA to AA+.