Monday, July 25, 2011

Standard and Poors Places United States on Credit Watch

Standard and Poors have placed several United States financial assets on negative credit watch placement. This means the United States will lose its AAA rating if it doesn't resolve the debt ceiling crisis. It also depends on how the debt ceiling is raised.

However, S&P has said it could move "even if a debt-reduction deal is met and the $14.29 trillion federal debt ceiling is raised. S&P has cited $4 trillion in debt reduction as a figure that would be appropriate for keeping the triple-A rating. S&P has also said it wants a credible agreement, meaning one that has bipartisan support."

Americans could have their homes foreclosed upon, if the Treasury Department cannot make bond payments for Fannie Mae or Freddie Mac. S&P has also place a negative credit watch on subsidized public housing and mortgage-backed securities. The federral government took more bad mortgages to bailout banks. This is many homeowners at potential risk.

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