Dollar weaker, gold jumps, stocks drop as S&P revises outlook on U.S. debt outlook to negative from stable, while S&P affirmed the AAA rating.
"Although we believe these strengths currently outweigh what we consider to be the U.S.'s meaningful economic and fiscal risks and large external debtor position, we now believe that they might not fully offset the credit risks over the next two years at the 'AAA' level," said Standard & Poor's credit analyst Nikola G. Swann.
Am I the only one that thinks is potentially good long term news? The initial response on the floor was, "This can't be good," but why not? Isn't a threat of a real ratings downgrade a good thing in this environment? That it is now more likely this will light a fire under policy makers and ensure that something gets done on reducing the deficit?
True, the road to austerity is not pretty (ask the U.K.) but it is a necessary part of the conversation.
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