Thursday, July 21, 2011

S&P Joins Moody's: Says 50-50 Chance of US Downgrade By August

S&P has just jumped on the bandwagon with Moody's threatening a US debt downgrade to AA by August unless significant budget cuts are agreed to by Congress.
We'll believe it when we see it. 
The day Moody's or S&P actually downgrades US debt you had better be 100% of the US dollar.

NEW YORK (Emily Flitter and Daniel Bases) - Standard & Poor's reiterated on Thursday it sees a real risk that future U.S. government deficits may meaningfully miss discussed targets and that there is a 50-50 chance the U.S. AAA credit rating could be cut within three months, perhaps as soon as August.

The deficit reduction debate is coming up against an August 2 deadline when the $14.3 trillion limit on America's borrowing capacity is exhausted, putting in jeopardy payments on U.S. Treasury debt as well as paychecks for federal employees and soldiers.
If an agreement is reached to raise the debt ceiling but nothing meaningful is done in terms of deficit reduction, the U.S. would likely have its rating cut to the AA category, S&P said.
Read more: