The real issue is the economy

Although the media is talking about the S&P downgrade, the real issue is the weakness in the economy. Pre-open the S&P futures are down but so are interest rates and the dollar is stronger relative to the Euro, Oil is down sharply also. The 10 year Treasury bonds closed Friday at 2.56% and as of today morning after the downgrade the same bond is at 2.49%.

Typically you don’t pay lower interest rates when your credit score goes lower.  I think this is an indication that the problem facing us in not our debt but our weak economy and the financial crisis going on in Europe.

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