SNL, Monty Python and whomever else – please stop messing with the economy. We take this stuff seriously you know.
Well well well…we’ve bypassed the legislative branch of our government (the super committee), shot our already slow economy in the leg with an austerity package and made a huge show of precisely how non-functional our great government can be – all to avoid a default, which, we were told, would damage our gold star credit rating, shake confidence in US T-Bonds, send the markets crashing to the ground, raise our interest rates and generally cause a financial Armageddon.
So we were told. So we were told.
Days – nay hours after the potentially crippling austerity bill came out of no where and was signed into law, guess what happened? 1 out of 3 credit rating companies, Standard and Poor downgraded our credit rating from AAA to AA+. They said they did it because our legislative system is dysfunctional (a very general paraphrase). In response, and despite the president’s comforting words, the markets dove straight for the bottom – the Dow Jones lost a total of 634.76 points on the first business day after the rating downgrade (more than 5%) and closed around the 10,800 mark (below 11,000 for the first time in months).
But get this: investors sold out of the stock market and bought gold and – no, you didn’t guess it: US Treasury Bonds.
Is anybody else confused?
So are we in trouble or not? Or are we in trouble or in trouble?
Over the next few days, I’ll do my best to unscramble the code and see what I find out.
Ambitionz
Ambition. Among Other Things. 