S&P downgraded US credit rating to AA+ which affected global stock market. Atleast, the good news is Moody's and Fitch still rates US as AAA. Moody's on the other hand lowered its outlook on US debt to "negative" which means it can lower its rating in a year or two.
What's the difference between AA+ and AAA? Almost nothing :-)
Now US government are saying that S&P made a mistake in downgrading its credit rating. So far, S&P is winning as reaction put pressure on investor to sell. But it is too early to know where this current crisis will bring us.
What's the difference between AA+ and AAA? Almost nothing :-)
Now US government are saying that S&P made a mistake in downgrading its credit rating. So far, S&P is winning as reaction put pressure on investor to sell. But it is too early to know where this current crisis will bring us.
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According to the news, Wall Street already knows about the US credit rating downgrade even before its announcement. They don't want surprises - lucky guys. They also blaming Timothy Geithner for the crisis and Timothy's answer is - "I will resign after the debt ceiling is over".
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This is the time that we need strong stomach. Prices are down. PSE is in the red zone. Of course, if you were able to get out before the US rating downgrade - you will be smiling by now.
Maybe a day or two would be a good time to buy. Although double dip recession is now flying around - but take it from Warren Buffet - he doesn't believe there will be a crisis in the near future.
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Another good news is the plan of European Central Bank (ECB) to buy bonds. This will ease pressure to Spain and Italy which now pulling down European Union's growth. Although EU is very slow on reacting to crisis - still this is a good step on their part. Maybe they should start learning from still frightening global economic situation.
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