US government may lose Triple-A rating
News that the US government may lose the vital Triple-A rating which the United States has enjoyed for some time sent shockwaves through US stock markets as the ferocity of the economic downturn finally began to hit home. While there does not appear to be any short-term likelihood of a downgrading of the AAA rating there are serious concerns for the future.
The long weekend in stock markets around the world has also given analysts and investors time to consider the impact a downgrade of the US credit rating would have on the worldwide market. It will be interesting to see how investors react when markets open next week as the next few weeks could be volatile to say the least. This comes hot on the heels of a suggestion that Standard and Poors may well be looking to downgrade UK national debt at a time when the UK economic overdraft continues to increase.
Governments around the world will be keen to avoid a downgrading of their own credit ratings as they have the potential to lengthen recessions and curtail any short-term potential for recovery. While a week is a long time in politics, a day is a long time in the US and worldwide investment markets!
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