Stocks Plummet On Downgrade, As Obama Defends AAA; Market Gurus El-Erian, Rogers Weigh In

While markets around the world and in the U.S. Monday after Friday’s information that Standard & Poor’s downgraded U.S. Monday evening that U President Barack Obama said.S. “one of the better in the world,” and that the real concentrate should be on tackling the nation’s deficit over the future. “No real matter what some company says, we have been always, and will be always, a triple-A-rated country,” Obama said from the White House.

’s ability to do something,” Obama said. 1,700 per ounce as traders fled equities. The two other rankings agencies-Moody’s Investors Service and Fitch-have yet to downgrade U.S. Market strategists were quick to consider along with their feedback about the downgrade. The “terms risk “U and free”.S. Treasuries” were once interchangeable; no longer, PIMCO CEO Mohamed El-Erian said Saturday after information of S&P’s downgrade. “For the real economy, credit costs for virtually all American borrowers shall be higher over time than they would have been otherwise,” El-Erian composed in an op-ed for The Financial Times. El-Erian notes that a domino effect will probably occur because of this of Friday’s action, and downgrades of Europe, specifically, will ensue.

“It is hard to imagine that, having downgraded the US, S&P won’t follow suit on at least one of the other members of the dwindling golf club of sovereign AAAs. Rating agencies have come under intense scrutiny and criticism because of their role in failing to accurately assess mortgage-related investments resulting in economic collapse in 2008. The vibrant step S&P has used is only going to increase said scrutiny, El-Erian says.

  1. Investors only consider one investment period. This is the same for everyone traders
  2. Express as an equivalent appearance: log x + log 1 – 8 log (y + 2) 9. ______
  3. Valuation Parameters
  4. Deduct 95% of the investment reduction if she or he is not pursuing recovery from a third party; or

“S&P’s action will likely unite governments in America and Europe in an effort to erode their monopoly power and operational influence. But more worrisome, he writes that “there will now be genuine uncertainties concerning wider systemic impact of the change …This will weaken the effectiveness of the U.S. As bad as it seems El-Erian points to a silver precious metal lining, noting the downgrade serve as a wakeup demand its policymakers “may. It really is an unambiguous and loud signal of the country’s eroding financial strength and global standing. It renders urgent the necessity to regain the initiative through better economic policymaking and more coherent governance.” David Kelly, key market strategist, J.P.

David Kelly, key market strategist for J.P. The fallout from S&P’s downgrade of U.S. The prospect of more turmoil emanating from Europe’s debt crisis. What, if anything, the Federal Reserve may want to do about all of this at their August 9th meeting. Kelly said that media coverage of the downgrade “has emphasized its potential to boost not only Treasury yields but also rates of interest paid by consumers and businesses over the economy. Concluded Kelly: “On one side, then, are worries of fear. In the other are convincing valuations.

There’s no magic lining to S&P’s downgrade of U.S. Axel Merk, collection manager of Merk Funds, said in a statement following a announcement. “The downgrade of U.S. S&P is the consequence of plans pursued over many years that rely on the U.S. Merk warns that the downgrade could be taken gently by some traders.

“Ratings agencies don’t desire to be caught later in downgrading anyone nowadays,” he said. “As such, many may at first shrug off the downgrade.” The downgrade could precede deleveraging, according to Merk, if U.S. Initially, the bond market may experience rebalancing to increase average security quality, but as a result, could increase allocations to Treasury securities, Merk said. Long-term harm in the connection market could be severe, he added, but warned that “just like a frog in a boiling pot,” pundits shall probably ignore that likelihood when facing a less severe initial bond market reaction. Merk is reducing currency allocations in Canadian, Australian and New Zealand dollars, and reallocating to the euro, Norwegian krone and Japanese yen.