If you want to know why the market got kicked in the balls today, I have the answer. So sit back, relax and let's talk about why the stock market is burning down. Wall Street Selloff intensifies with the Dow losing 300 points after Fitch downgrade. You know, with the day we're having and the amount of people who are probably yoloing into calls, this might be about one letter off on what people are really wanting to call it.

Fitch downgrades us long-term rating to a A plus from AAA. So to put that in layman's terms, you have a rating of credit worthiness and that includes the US government and many other governments and businesses and municipalities and blah blah blah blah blah. So when it comes to the US government and their credit worthiness, the tippity top of the peak, you are the most reliable government out there. That's AAA that's where we were and then Fitch came in and said, well, we're gonna move you down in Peg Is this functionally actually do anything? Does this mean that whatever, insurance plans and hedge funds and investors are all going to start selling this? because like, the US is no longer the tippity top No, not really.

because double A Plus is still in a relative basis. Pretty freaking. High Treasury Secretary Yellen and says surprising Fitch downgrade is entirely unwarranted. So basically the smeagle character of the US government is not happy with what's going on and says, hey, that's not fair Play by the rules I Want you to play by Treasury secretary Jenny Ellen called Fitch's credit downgrade surprising considering the nation's strong economic recovery from The Rona period Well It had nothing to do with the recovery.

The reason which I'm about to get into has to get into the almost sad aspect of how our government acts Yellen touted recent robust U.S economic numbers and said treasury Securities Remain the world's preeminent safe and liquid asset. Once again, they weren't arguing that they were just saying our government. In fact I wrote down some of their quote they've lost confidence in the government's physical fiscal management JPMorgan CEO Jamie Dimon calls Fitch rating U.S downgrade Ridiculous but says doesn't really matter It's honestly the latter point that I kind of find into interesting that I did what are you talking about Man, it just doesn't matter. But obviously it clearly does have a pretty vast impact.

I mean right now the Spy as I'm filming this is down 1.5 percent. Yesterday we closed out in the realm of 456 and some change. We're currently trading below 450. so clearly there's some sort of impact, so it's worthwhile to dive into.

What are they looking at? What was the decisioning? and is this the start of a downturn? Now before we get into it, I Think it's silly to call for doomsday. The Market's been ripping since March It's been over a month and a half 40 plus trading days and the market hasn't gone down one percent in a single day. That's a long record, if anything. We were kind of due for a healthy pullback.

I'm not calling doomsday, but to think that everything is green and ripping all the time. That's just simply not how the markets work. But anyway, here's Fitch's reasoning: The Fitch Analyst behind the US downgrade breaks down the decision and how the country can regain the top rating according to the analyst and a representative from Fitch. This is a steady deterioration we've seen in key metrics for the US for a number of years.

In 2007, General government debt was less than 60 percent, and now it's 113, so there's been a clear deterioration. Furthermore, we're expering fiscal deficits to rise over the next three years, and we expect debt to continue to rise over the next three years. Francis Said that in addition to the January 6, 2021 Insurrection The rating agency has noted a constant brinksmanship surrounding the debt sailing among both Republicans and Democrats that has hindered the U.S government from coming up with meaningful solutions to deal with growing fiscal issues, particularly around entitlement programs such as Social, Security and Medicare. That's pretty sound reasoning.

They're looking around and saying, hey, do they really deserve the best credit worthiness rating Whenever it comes to budgets and deficits and government shutdowns, there's always just political infighting. If anything, it's more of commentary on the gridlock of politics within the U.S kind of the divisive nature that we have between red and blue, left and right, and everything else that we apparently get divided on among these days now. I Do want you to note that this has happened before previously a different rating agency. The S P rating agency actually downgraded the US.

It lasted for a little bit. there was a bit of a hit, but then we ended up coming back. So yes, in the very short term, depending on when you're watching this, I'm expecting the Bears to feel a little bit more confident. the bear is to feel a little bit more lively, a little bit more back to life because they've been getting their skull kicked in lately.

Will it last forever? No. I don't think so. I Think this is something in the media cycle that we're going to be covering for a day or two. There's going to be some bearishness in the market and then out of nowhere.

Basically, I think the world's gonna end up forgetting. So that's what's going on. That's why the market took such a hit. Big hit today.

I Do expect some bearishness to continue, but this is more of a short duration thing. I Don't think this is going to have a massive lasting impact on the stock market or really the overall economy. Obviously, if you have any questions, let me know.