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Showing posts from April 19, 2011

Stirring Congress to act as one

Business Times - 20 Apr 2011


Stirring Congress to act as one

S&P admonishes Washington but Moody's cautious optimism makes more sense

By LEON HADAR
WASHINGTON CORRESPONDENT

THE decision by the credit rating agency Standard & Poor's to lower the outlook on the US credit to 'negative' has been sending shockwaves across Wall Street and Washington. While the US has kept its AAA rating, the downgrade by S&P was a sign that the agency believes that there was a 33 per cent chance that it would have to lower its debt rating on US debt in the next two years.

Currently, US government debt is regarded as one of the safest investments. But if S&P decides to change its rating, that could have huge repercussions for the status of the US and its currency in the global economy.

'More than two years after the beginning of the recent crisis, US policymakers have still not agreed on how to reverse recent fiscal deterioration or address longer-term fiscal pressures,' S&a…