Tuesday, August 9, 2011

Why the U.S. Credit Rating Downgrade Could Cause a Full-Fledged Market Crash

By Jason Simpkins, Managing Editor, Money Morning
That Standard & Poor's finally downgraded its U.S. credit rating surprised no one - the agency said weeks ago that it would require a deficit-reduction agreement of around $4 trillion to affirm its AAA rating on the United States. But what the ratings agency doesn't realize is that it's playing with fire. Because what we've seen over the past few weeks has been a massive sell-off in the stock market that suggests Wall Street's biggest players are scrambling to bolster their net capital positions. And it's entirely possible that this already-stiff correction will snowball into a full-blown market crash.

Read More: http://moneymorning.com/2011/08/09/why-us-credit-rating-downgrade-could-cause-full-fledged-market-crash/

Investing Icons Weigh In On U.S. Credit Downgrade
By Kerri Shannon, Associate Editor, Money Morning
The market's verdict on the Standard & Poor's (S&P) U.S. credit downgrade is in - and it isn't good. In direct response to the U.S. credit downgrade, the Dow Jones Industrial Average plunged more than 631 points, or 5.52%, yesterday (Monday), after falling 6% last week.No question, we're in the midst of a free-fall. And there's no doubt about the role Washington played in creating this dangerous situation. But U.S. policymakers aren't the only ones to blame.Some of Wall Street's heaviest hitters, including Warren Buffett and Bill Miller, have zeroed in on S&P for perhaps being a little too overzealous in its approach.

Read More: http://moneymorning.com/2011/08/09/investing-icons-weigh-in-on-u-s-credit-downgrade/

The Real Reason for Yesterday’s Stock-Market Sell-Off
By Shah Gilani, Contributing Editor, Money Morning
On Aug. 11, 2010, the Dow Jones Industrial Average plunged 265 points, or 2.5%.
This Tuesday - almost exactly one year later - the Dow dropped ... 265 points.
Those carbon-copy stock-market sell-offs weren't a coincidence. - as yesterday's (Thursday's) 512-point drop and further weakness will prove.Although the Dow is more than 700 points higher than it was at this time a year ago, U.S. stock prices are currently following virtually the same trading pattern that they did in 2010: Last year and again so far this year the early-year gains came to a halt in May, and the markets then fell through August.

Read More: http://moneymorning.com/2011/08/05/the-real-reason-for-yesterday%E2%80%99s-stock-market-sell-off/

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