After the market close on Friday, credit rating agency Standard & Poor's made good on its threat to downgrade US debt. In lowering the long-term sovereign rating from AAA to AA+, S&P cited their view that "the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges . . .". Adding insult to injury, they left the rating outlook as negative, warning that they could lower it to AA within the next two years if they see fewer reductions in spending, higher interest rates or new fiscal pressures that result in higher than anticipated government debt levels.

For more than a year now the economic crisis in Greece has been a prominent feature in international financial publications. Greece is one of the smaller countries in the European Community (EC) but it is also one of the most highly indebted (followed closely by Ireland, Italy, Portugal and Spain).  Greek national debt to GDP ratio stands at about 120% and the budget deficit of 12.7% and growing has placed its fiscal position in jeopardy and the country is on the path to defaulting on its debt payments by the end of the year unless it is able to secure parliamentary approval for a bail-out package which was designed by the European Union and the IMF.