How will the S&P downgrade affect you?

August 09, 2011|By Luke Broadwater

How will Standard & Poor’s downgrade of the United States’ credit rating affect you? Well, that depends on which "you" you are.  

• If you happen to be a rich stock investor, it means you can expect a period of market volatility. Meaning, your portfolio will be behaving a lot like an Alec Baldwin voicemail. 

• If you’re a regular joe (like us here at b) with no investments or financial prospects, it means your biggest worry is markets dropping faster than JWoww drops dress sizes. That is, dropping so much that companies start layoffs. If Tuesday’s market rally is any indication, hopefully that won’t happen. 

• If you’re Barack Obama, it means conservatives like Rush Limbaugh are referring to you as “Debt Man Walking.” With this oh-so-clever play-on-words on your mind, maybe it will make you wonder if starting yet another war while expanding entitlements was such a good idea in the first place?  

• If you’re John Boehner, it means you will continue tanning. 

• If you’re gold, it means your value’s getting higher than a passerby at a Wiz Khalifa show. 

• If you’re other markets around the world, it means you will take a look at what U.S. markets did, and then repeat. Then you will wonder why your country will never be a world leader. 

• If you’re a treasury bond, it means (amazingly) even more people want to invest in you. Let’s be honest: No one really knows how markets work (we’re talking about myriad investors making individual decisions) and no one can predict the future. U.S. treasury bonds got downgraded, so people sold their stocks and bought those? 

As perplexing as the market can be, the downgrade at bare minimum means this: The U.S. needs to get its spending under control or pretty soon we’ll all end up jobless, hopeless and leaving rambling, desperate messages on people’s voicemails. 

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