Treasury Secretary Timothy Geithner meets with President Barack Obama while Larry Summers, the White House’s former top economic adviser, lurks in the background.
Standard & Poor’s, one of those ratings agencies that made a living signing off on toxic assets, has once again thrust itself into the spotlight by downgrading Uncle Sam’s credit outlook from “stable” to “negative.” As a consolation prize, S&P let us keep our AAA rating. —PZS
New York Times:
Many analysts were surprised by the market response to the revision, which cut the long-term United States debt rating to negative from stable. The S.&P. also affirmed the government’s AAA rating.
“The idea that the U.S. public finances are on an unsustainable trajectory is hardly new news,” economists from Capital Economics said in a research note. “Indeed, we warned that the U.S. might be downgraded, or at least put on negative watch, as far back as nearly two years ago.”