S&P may face investigation over downgrade

While markets opened higher today, traders can take a bit of solace in the possibility of a little revenge in store for the S&P downgrade that tipped off last week’s equity market carnage.

The U.S. Securities and Exchange Commission, which has jurisdiction over ratings agencies, is said to be taking a look at Standard and Poor’s math, as well as rumours the ratings agency may have leaked news of the downgrade prior to its August 5th announcement.

The primary concern of many observers is that the U.S. Treasury Department and Federal Reserve have a smaller toolkit to deal with this crisis, as compared with 2008, and all evidence is showing that low rates aren’t enough to rekindle consumer spending.

There’s optimism in South Korea, though, where officials say they have plenty of experience weathering economic crises and that this time will be no different. And at least one investment blogger has some good ideas for a policy path that would help resolve some of the nagging issues.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.