This damage is because of a dysfunctional Congress.
They held our economic welfare hostage...
And McConnell plans to do this again & again, in his warpted mind its useful... clo
CNBC's John Harwood reported that S&P told the federal government at 1:30 p.m. ET Friday that it was preparing to downgrade the country's rating. But Harwood reported that after U.S. officials pointed out an error in how S&P computed the ratio of U.S. debt to the gross domestic product, S&P decided to reconsider.
A source said S&P's calculations were off by "trillions," CNBC reported. A source familiar with the discussions said that the Obama administration believes S&P's analysis contained "deep and fundamental flaws."
The rating agencies have been under fire since the financial meltdown of 2008 because they often gave high ratings to bundles of mortgage-related securities that were risky and ultimately failed.
The impact of S&P's move was tempered by a decision from Moody's Investors Service earlier this week that confirmed, for now, the nation's top-drawer Aaa rating. Fitch Ratings said it is still reviewing the rating and will issue its opinion by the end of the month.
"It's not entirely unexpected," said Vassili Serebriakov, currency strategist at Wells Fargo in New York. "We expect some further pressure on the U.S. dollar, but a sharp sell-off is in our view unlikely. ... There are still few alternatives to the U.S. Treasury market in terms of depth and liquidity."
S&P's move is likely to concern foreign creditors especially China, which holds more than $1 trillion of U.S. debt. Beijing has repeatedly urged Washington to protect its U.S. dollar investments by addressing its budget problem.
The downgrade could add up to 0.7 of a percentage point to U.S. Treasuries' yields over time, increasing funding costs for public debt by some $100 billion, according to SIFMA, a U.S. securities industry trade group.
S&P had placed the U.S. credit rating on review for a possible downgrade on July 14 on concerns that Congress was not adequately addressing the government fiscal deficit of about $1.4 trillion this year, or about 9.0 percent of gross domestic product, one of the highest since World War II.
The unprecedented downgrade of the nation's AAA credit rating by a major ratings agency comes only 15 months before the next presidential election where the downgrade and the debt will be top issues for debate.
Bitter political battles remain over the ideologically fraught issues of spending cuts and tax reform.
The compromise reached by Republicans and Democrats this week calls for the creation of a bipartisan congressional committee to find $1.5 trillion of deficit cuts by late November, beyond the $917 billion already identified.
Reuters and CNBC contributed to this report.
http://www.msnbc.msn.com/id/44040574/ns/business-stocks_and_economy/
DO SOMETHING!
| 
