I tend to be an optimist, and thought (hoped) that once the debt ceiling deal was finalized, the nation would refocus and we could get back to the business of economic recovery.
It is usually the Federal Reserve that is accused of taking the punch bowl away just when the party gets rolling, but this year Standard & Poor’s stepped in to be the “bad cop” by downgrading their U.S. Government long-term AAA debt rating to AA+ for the first time since granting it in 1917. This last week has brought back painful memories of 2008, with all-too-familiar volatility in the equity markets and plunges in the value of retail investor portfolios and 401(k)s.
But what will the long-term effect be?
Dave Goerz, SVP and Chief Investment Officer for HighMark Capital (the Adviser which manages our National Investment Fund for Credit Unions) has posted an excellent commentary that puts the recent debt rating downgrade into historical context and outlines some of the steps that can be taken to address the deficit and political concerns that prompted the downgrade. Read more