News / Asia

Global Markets Down After S&P Cuts US Credit Rating

A money trader waits for calls from clients during the morning trading at a money brokerage in Tokyo Monday, Aug. 8, 2011.
A money trader waits for calls from clients during the morning trading at a money brokerage in Tokyo Monday, Aug. 8, 2011.

Global markets continue to have a negative reaction to Friday's first-ever downgrade of the U.S. credit rating by the Standard & Poors rating agency.

Asian stock markets tumbled in trading Monday.

Tokyo's Nikkei index fell nearly 2.2 percent (202 points) to close at 9,098.

Hong Kong's Hang Seng index also dropped nearly 2.2 percent (456 points) to end at 20,491.

Elsewhere, share prices dropped around three percent in Shanghai, Sydney, Wellington, Taipei and Manila.

The dollar was selling at 77.83 yen in currency trading, down six-tenths of a yen (0.57 yen) from late Friday.

Mideast markets closed down sharply on Sunday, including a 7 percent plunge for the Tel Aviv stock exchange.

U.S. Treasury Secretary Timothy Geithner says the S&P used "terrible judgment" when it downgraded the U.S. credit rating last week from the top triple-A grade. Geithner told CNBC television that the S&P showed a "stunning lack of knowledge" about the mathematics used to draw up a federal budget.

The downgrade signals that the S&P believes U.S. government bonds are now a riskier investment. S&P Managing Director John Chambers predicts another possible downgrade as soon as six months from now.

But Geithner said the United States has a very resilient and strong economy. He said U.S. treasuries are an absolute safe investment and that there is no risk of the United States not being able to meet its obligations.

The other two major credit rating agencies, Moody's and Fitch, have so far kept the U.S. AAA rating.

S&P defended its decision to drop the credit rating. It blamed Congress for months of political haggling over a deficit reduction deal that S&P says does not go far enough. The deal calls for cutting the deficit by more than $2 trillion over 10 years. S&P called for $4 trillion in savings.

Geithner said Sunday he will not resign. He was considering leaving the job when the debt ceiling debate in Congress ended.  A White House spokesman said President Obama is pleased that Geithner will remain at his post.

Republican Senator Rand Paul and Congresswoman Michelle Bachmann, a Republican presidential candidate, have both publicly demanded that Geithner quit, holding him and the Obama administration responsible for the lowered credit rating.

You May Like

UN Watchdog Urges Israel to Probe Possible Gaza War Crimes

More than 2,100 Palestinians, most of them civilians, were killed in a 51-day war in Gaza, along with 67 Israeli soldiers and six civilians in Israel More

New Kenyan 'Thin SIMs' Poised to Transform African Mobile Money

Equity's new technology is approved in African nation for one-year trial, though industry leader Safaricom says thin SIMs could lead to data theft and fraud More

Solar's Future Looks Brighter

New technology and dropping prices are contributing to a surge in solar power More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Talks to Resume on Winter Gas for Ukrainei
X
Al Pessin
October 25, 2014 4:21 PM
Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Talks to Resume on Winter Gas for Ukraine

Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.

All About America

AppleAndroid