[quote=afx114]I’m not an economist, so maybe one can explain to me. If the S&P downgrade was such a big deal, why are people still pouring money into US Treasuries, driving it down to very low rates? Is it because the US is still the least worst of many worster options? (Yes, I just said ‘worster’).

And why is the media associating the current stock slide with the debt downgrade? Isn’t the stock slide due to Europe, unemployment, etc rather than the downgrade? If the downgrade had anything to do with the stock market, shouldn’t we be seeing treasury rates rise while stocks fall?[/quote]

You’d think that everyone would get this. Unfortunately, too many people are unable to think for themselves, so they buy into the “crisis” as it’s explained to them by the MSM.

I totally agree with you about what’s causing the falling stock market. In a world of ugly stepsisters, you only need to be less ugly in order to win a suitor. IMHO, the dollar has been what’s driving markets for the past few years — it’s been intentionally weakened so that they could inflate asset prices to calm everyone down after the “crisis.” Everyone was betting against it by going into other asset classes and currencies, and now that the Euro looks ripe to implode, traders are rushing to reverse their positions. Just a guess, but we’ll see how things turn out.

As I’ve said before, S&P is probably working on behalf of the Fed and U.S. govt by trying to slow down the stampede into the dollar. Next step is another downgrade from another ratings agency, followed by an annoucement of QE3.