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Politics : Liberalism: Do You Agree We've Had Enough of It? -- Ignore unavailable to you. Want to Upgrade?

To: JakeStraw who wrote (109909)	8/5/2011 8:08:50 AM
From: lorne	Respond to of 224728

China downgrades America By James Kwantes] 4 Aug 2011 communities.canada.com The line jumped out at me from a recent CMC Markets morning note: "China's credit rating agency Dagong downgraded the U.S. to A from A+ with a negative outlook, citing the increased debt limit and questions over creditor protection in the current political and economic environment." America, you've been Dagonged. Here's the Daily Mail story. The move "suggests that China may be getting more concerned about its U.S. exposure and that it may be stuck holding the bag should another financial or political crisis flare up," according to CMC Markets analyst Colin Cieszynski. China's problems have been well-documented -- including, depending on whom you talk to, a residential real estate bubble, rising inflation and questionable corporate governance. But the Asian powerhouse is also the top foreign holder of U.S. debt. That would be the debt that narrowly escaped getting downgraded by American ratings agencies in the wake of the theatrical U.S. debt ceiling fiasco. So China has a direct stake in what happens south of the border, just as the rest of the world -- including Canada, increasingly -- has a direct stake in China's economy. Some commentators contend that the Chinese economy is sailing along on a bubble inflated by cheap government money and real estate speculation -- sound familiar, Canada? But it's hard to argue that in a world where the power balance is shifting from west to east, China's economic clout is rising as quickly as America's is falling. On the stock markets today, the S&P/TSX Composite Index was getting hammered in early trading. The TSX was down more than 450 points, or 3.5%, as investors fled for the exits in the face of global economic worries. Crude oil prices reflected fears that the economic recovery has stalled: North American crude was down more than $2 to $89.88 US a barrel. Gold was holding steady at $1,660 US an ounce but mining stocks were down across the board: First Quantum Minerals was down more than 8% to $114.97, Teck Resources dropped more than 6% to $43.06, Goldcorp was down 3% to $45.50 and Lundin Mining was down 17% to $5.55. The Dow Jones industrial average was down more than 2.5% to 11,570 and the Nasdaq dropped 90 points to 2,603. The Canadian dollar was more than 1.3 cents lower to 102.63 cents US and gold was down slightly to $1,660 US an ounce.