|August 8, 2011 ||
Special Bulletin from Neiman & Associates Financial Services, LLC :
S&P Downgrades US Debt
We are issuing this bulletin in response to Standard and Poor's lowering the credit rating on US debt. This appears to be more of a political maneuver than an economic one in that the justification of the downgrade was based primarily on Congress' inability to govern versus the country's ability to repay its obligations.
Another thing to keep in mind is that S&P and the other credit rating agencies rated collateralized mortgage obligations (CMOs), a key catalyst to the financial market meltdown, AAA (the highest rating possible) and continuted to maintain this rating even as mortgage defaults escalated and the viability of these securities quickly spiraled downwards.
Perhaps S&P thought it best to do something than nothing (like last time). But, one has to question its credibility, since the analysis contained a $2 trillion error (yes, trillion) in its estimate of future US deficits.
Below you will find a summary of what this means to you and the markets. Feel free to contact me with any questions or concerns.
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