The United States faces a crisis not seen since the Depression

[CHIMO]

Maybe it's because Boston is different, a semi-detached city in one of the US's most liberal states. But the news that the world's biggest economy had had its creditworthiness challenged for the first time by the upstart rating agency Standard & Poor's (S&P) hardly seemed to register with the locals.

No one I met fulminated about loss of economic sovereignty or that S&P, whose purblind approval of junk mortgage debt as triple A was one of the causes of the financial crisis, had finally over-reached itself. Bostonians seemed unconcerned. Perhaps this was because it was just one more surreal moment in the pantomime that is American economic and political life.

That was how the markets judged the news. There was a momentary tremor in the Dow Jones. Some analysts shrugged it off; others thought it profoundly serious. But soon the markets were on the rise again as if nothing had happened.

The Obama administration played it down. Tim Geithner, the secretary of state for the Treasury, said that S&P was behind the political curve; the prospects for a bipartisan deal were now better than they had been for months. If the hope was to provoke a change in the debate about the US's record budget deficit, S&P must have been disappointed.

http://www.guardian.co.uk/commentisfree/2011/apr/24/will-hutton-america-debt-crisis

[CountAllVotes]

1. as if things are any better at all in the UK

They aren't and gee look who wrote this.

[libmom74]

2. I trust the Guardian

much more than our crap media.

[RKP5637]

3. We look and sound like damn fools IMO to the rest of the world. Yes, I'll trust the

Guardian any day than our crap propagandistic MSM.

[txlibdem]

6. Agreed

You might get more truth from the Libyan media than the corporate-owned and "always on message" American MSM.

[Overseas]

4. K&R.

Yes it was just one more surreal moment in the pantomime.

[Lucky Luciano]

5. Our debt/GDP is 65% (and admittedly growing fast).

Canada lost its AAA in the early 90s at 120%...and they are doing quite well right now.

In fact Canada has higher short term rates as controlled by their central bank, but their 10Y yields are lower than ours. You can maybe consider that a proxy for how much better their current credit rating is. S&P making an announcement should really cause no market movement as the bond market already priced in the fact that the US credit rating is beneath Canada's and isin need of some help.