Good article. The following quote is notable for showing just how clueless S&P is:

"It doesn't address the fundamental problems, which is that financial markets are just scared," said David Wyss, Standard & Poor's chief economist. "The Fed is trying, but they don't have a magic wand to wave and make everyone confident again."

Sorry, David, try again. The problem isn't that the market just happens to be scared. The real problem is that it is scared for a reason: insolvency and defaults are spreading, all as a direct result of the United States living above its means for three decades.

If the market were "just scared", then the correct course of action would be to smooth things over until the turmoil passes. That is what the Fed has been doing. Obviously, it isn't working. That is because the problems are real, deep-seated, and the Fed can't do a damned thing about them.

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