I’ve checked off a few once-in-a-lifetime boxes at age 45: As a goggle-eyed kid I watched Neil Armstrong step onto the moon, several years later wore my most patriotic red/white/blue shirt (with red socks!) to celebrate our nation’s 200th birthday, strode across the stage for high school and collegiate graduation (as many do – I didn’t say this was an exclusive list!), got married and divorced (the latter of which I hope will only be once), and so on. As of Friday afternoon, however, I unfortunately must add to that list of once-in-a-lifetime occurences that I’ve witnessed the downgrade by Standard & Poors of the US sovereign credit rating.
In my earlier posts I mentioned a few of the questions now standing front-and-center before the markets and investors. While anyone who says they know what will happen tomorrow and in subsequent days should be dismissed out of hand, I offer below commentary from some of those I read and respect:
Financial Times: S&P Cuts US Debt Rating to AA+
Economist: S&P’s Credit Rating Cut: Downgrading Our Politics
PIMCOs Mohamed El-Erian: US Downgrade Heralds a New Financial Era
NPR’s Planet Money: Why S&P’s Downgrade of the US Credit Rating May Not Be As Bad As It Sounds
Barry Ritholtz: 10 Questions About the S&P Downgrade
As I write this on Sunday afternoon several firms with typically insightful commentary have not opined since S&P’s action, so I’ll append the post as other comments become available.
UPDATE 9:30PM MONDAY 8 AUGUST 2011:
As the market reopened today (and took a 6.7% shellacking) additional firms shared their assessment.
Vanguard: Downgrade Should Mean Little for Long-term Investors
Absolute Return Partners: Why The US of AA Matters
QB Asset Management: Downgrade of US Treasury Obligations Legitimate and Insufficient (hat tip Ritholtz.com)
Paul Kasriel (Northern Trust): S&P’s Downgrade of US Sovereign Debt – People Actually Pay Them For These Opinions?
John Hussman: Recession Warning and the Proper Policy Response