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A comment on United States loses AAA credit rating from S&P . Parent comment

Re:United States loses AAA credit rating from S&P by berberich on Friday August 05, 2011 @09:15PM (#2852534)
I don't think this is correct. Planet Money did a recent podcast on this very subject (Would A Downgrade Matter?)[1], and they concluded that a downgrade from AAA to AA+ doesn't matter very much in the long run. Yes, it's somewhat embarrassing, and interest rates are likely to go up _slightly_, but that's about it.

The big leap is from "investment grade" securities to "junk bonds" ('BB'/'Ba' or less). We're still a long way from there.

[1]: http://www.npr.org/blogs/money/2011/07/28/138721364/

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Re:United States loses AAA credit rating from S&P by mdda on Friday August 05, 2011 @09:18PM (#2852542)
Maybe long-term the interest rates don't go up much. But the main impact is a huge rocking-the-boat in the banking system : one of the bedrock ideas has just changed. You wouldn't want to do this if the banking system were strong. Now is really not a good time...
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