Interest Rates, Not S&P Ratings, Are The Key Metric For America’s Sovereign Debt

[AP] - Standard & Poor's Ratings Service has lowered its long-term outlook for the United States' sovereign debt to "Negative" from "Stable" due to risks from the country's growing deficit.

With Japan's public debt about to hit 240% of GDP, Fitch Downgrades Japan's Sovereign Rating The ratings agency Fitch on Tuesday lowered its assessment of Japan’s sovereign credit to A+, an investment grade just above the likes of Spain and Italy, and criticized Tokyo for not doing more to pare down its burgeoning debt.

The ratings service lowered the outlook from "stable" to "negative" due to risks from the country's growing deficit, but it reaffirmed the investment-grade ratings on long-term and short-term debt.» E-Mail This     » Add to Del.icio.us

The lack of cheap capital and lucrative investment options has sent foreign investors back to the US toxic market, reported Financial Times.   

In a confirmation that the S&P is starting to get worried about the drones surrounding the McGraw Hill building resulting from the ongoing litigation with Eric Holder's Department of Injustice, not to mention a reminder that US downgrades always happen after hours, while upgrades must hit before the market opens, Standard & Poors just upgraded the Standard & Poors 500 the US outlook from Negative to Stable.

Credit rating agency Standard & Poor's has revised up its outlook for the USA's credit rating to stable from negative. In 2011, S&P stripped the USA of its AAA credit rating and put it on negative outlook. The credit rating agency also raise the outlook for the Federal Reserve and the Federal Reserve Bank of New York's ratings to stable from negative.

By John M. Mason: "Standard & Poor's raised its outlook on the U.S. credit rating to 'stable' from 'negative' on Monday, giving a vote of confidence to the U.S. economy…" (See WSJ article.)

Though it may seem a little like stating the obvious to many, Moody's comments: While the risk of a euro exit by Cyprus is substantial... ...following the economic dislocation that will be caused by the restructuring of the island's two largest banks and the imposition of capital controls in the country, it is possible that the risk of euro exit will increase further.