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August 06 2011


US Credit Rating Downgrade: The Important Detail

Whatever the rating the US Treasury market is the largest, deepest and most liquid in the world. Further, a ratings agency isn’t in fact determining the likelihood of repayment nor even really the credit rating: with sovereigns, it’s much more true to say that they’re summing up what the wider market already thinks.

So, in this limited sense the move in the rating is simply confirming what the market already believes and markets don’t move on old information, they move on new information.


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