Moody's Put US Debt on Downgrade Review

[skwdenyer]

Moody's have announced that, in light of the US legislature's potential desire not to extend the borrowing cap, they are putting US debt on downgrade review.

Chinese agency Dagong has similarly put US debt on 'negative review'. S&P more-or-less threatened the same in April if the US didn't start to reduce its defecit, something it of course hasn't really done.

How cataclysmic do people think a downgrade would be?

[Fittster]

I don't think the Fed pays much attention to the rating agencies when buying bonds.

An example of very wishful thinking:

"BEIJING (Reuters) - China's Foreign Ministry said on Thursday that it hoped the U.S. government would take a responsible attitude to protect investor interests, in Beijing's latest expression of concern about the possibility of Washington briefly defaulting on its debt.

Moody's Investors Service warned on Wednesday that the United States may lose its top credit rating in the coming weeks if the limit on American borrowing was not raised.

"We hope that the U.S. government adopts responsible policies and measures to guarantee the interests of investors," ministry spokesman Hong Lei said at a regular news briefing in Beijing, when asked about the Moody's report."