The US Credit Rating Drop: it's all baloney

[TehBorken]

[font face="Verdana"]via /.
   
 Last Friday Moody's S&P announced that they had downgraded the US's  credit rating. Since then more interesting news has come out:
   
 "In a document provided to Treasury on Friday afternoon, Standard and  Poor's (S&P) presented a judgment about the credit rating of the  U.S. that was based on a $2 trillion mistake.
   
 After Treasury pointed out this error- a basic math error of significant  consequence -S&P still chose to proceed with their flawed judgment by simply changing their principal rationale for their credit rating decision from an economic one to a political one.
   
 S&P incorrectly added that same $2.1 trillion in deficit reduction  to an entirely different baseline where discretionary funding levels  grow with nominal GDP over the next 10 years. Relative to this  alternative baseline, the Budget Control Act will save more than $4  trillion over ten years- or over $2 trillion more than S&P  calculated.
   
 S&P [a href="vny!://online.wsj.com/article/SB10001424053111903366504576491421339802788.html?mod=WSJ_hp_LEFTTopStories"]acknowledged this error[/a]  in private conversations with Treasury on Friday afternoon and then  publicly early Saturday morning. In the interim, they chose to issue a  downgrade of the US credit rating."
   
 [/font][font face="Verdana"]vny!://online.wsj.com/article/SB10001424053111903366504576491421339802788.html?mod=WSJ_hp_LEFTTopStories[/font]
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[DDD]

S&P need to be down graded

[DDD]

dollar hit par last night

[Sportsdude]

The Canadian dollar is now a petro dollar tied to solely to commodities and the oil price; this is great for western Canadian firms dealing with commodities not named timber, but horrific for Central Canada and its manufacturing base. Global consumption + global growth/development = high demand for commodities and a high oil price = higher Canadian dollar vs. American dollar; higher Australian dollar vs. American dollar, etc. When things go south, investors don't buy Canadian treasuries because of its ties to commodities, they actually buy US Treasury bonds. This is why the Canadian dollar went down to 82 cents during the recession. However in the past two days, especially today with the Fed announcement, the reactionary panic-speculators who control these things have placed their money in gold and Swiss francs - the Francs less so today.