U.S. DOWNGRADE MAY NOT AFFECT INSTITUTIONAL TREASURY HOLDINGS (SLV, GLD, TBT, TBF, TLT, SPY, DIA, QQQ, ZSL,)
….Correct Information About The Law
Here is what the law is:
- While S&P cut the long-term rating, it reaffirmed the short-term rating for the US at the top A-1+ level. This means money market funds will not be forced to sell US Treasuries.
- Most banks in the United States are regulated by the Federal Reserve Bank. The Federal Reserve has issued a crystal clear statement that there is no change in the risk weighting of US Treasuries. This means that the banks will not be forced to sell US Treasuries.
- Most insurance companies in the United States are governed by state regulators.
August 8, 2011