Is the world due for downgrading?
I just read John Mauldin's introduction where he is talking about the downgrade, which is actually entertaining in how he describes his disbelief.
I never thought about what the reprecussions are in terms of how the rest of the world is rated on their debt, and he certainly asks questions about it. It is going to be an interesting week.
Early in my analysis of what was happening with the level of debt I expected risk to be repriced into lending. IMHO, there has been no risk priced in the rates and rates seem artificially low, and here it is 4 years later and debt is still very cheap.
Maybe this is the start of repricing debt to reflect the risks.