8 August 2011
“Of course, there’s no country that will be glad to be downgraded by us — we got used to sharp criticism in such cases,” – David Beers, S&P’s head of the sovereign ratings group said recently.
On Monday the stocks extended their losses. After Standard & Poor’s cut the U.S. AAA credit rating, the S&P 500 fell by more than 6.60%. The Dow Jones industrial average felt by 634 points (5.55%). Meanwhile, Canadian TSX dropped by 492 points (4.00%). Canadian dollar felt by 1.25 cents to 100.92 cents US. Oil is down $5.57 to US$81.31 which should bring down prices at the pump tomorrow.
If this situation continues banks may face another liquidity crisis and discounts on variable rates might disappear. If you are thinking of getting variable rate mortgage get your application to the mortgage broker ASAP.