Markets Nosedive As U.S. Outlook Downgraded to AAA Negative; If AA, Pension Funds Must Sell

The markets went on a nosedive in pre-markets, and so did bonds. To top off Greenspan's very negative comments yesteray, Standard & Poor's downgraded the outlook for the United States to negative.

S&P believes there is a risk U.S. policymakers may not reach agreement on how to address the country's long-term fiscal pressures. The outlook is now AAA negative.

This is big news because if the ratings are changed to AA, the understanding is that many or most pension funds may  longer hold those bonds. Now that is scary indeed.