Well it is here and you cannot say S&P didn't warn you that it was coming. I was at the PCN this morning when the news arrived on my phone. Came from FT, WSJ and NYT. This is a significant moment in financial history. Returning home, I found a good article by Bloomberg on this event my ex boss mailed me.
There is a lot of speculation of what this means. Also Moody and Fitch continue to give the US their highest ratings. What is important, which nobody wants to talk about is would the American legislature conduct business better instead of being childish and narrowly interested. If this is not righted, nothing will matter. I suppose the markets will continue to punish America for this but there will be many interrupted moments when crises elsewhere still send money to this erstwhile safe haven.
Perhaps some hardship is needed for slow learners in both houses of Congress. The rest of the world would just have to make the necessary adjustments. It is not a happy world but don't forget everyone had a hand, especially the leaders and their rich backers in taking us here. As consistent with human history, it is the masses that would bear the brunt of it. How would they respond, and the push back is moot. I think it is a matter of time many societies want to rewrite their social compacts.
The pendulum having swung to one extreme must begin to swing the other way.
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