[ACoochy]

http://online.wsj.com/article/BT-CO-...13-714624.html
Moody's Investors Service put its Aaa rating on the U.S. government's bond rating on watch for possible downgrade, citing the "rising possibility that the statutory debt limit will not be raised on a timely basis," which would lead to a default on U.S. Treasury debt obligations.
The ratings agency said in conjunction with Wednesday's action, Moody's placed on review for downgrade its ratings on financial institutions directly linked to the U.S. government, including Fannie Mae (FNMA) and Freddie Mac (FMCC).
Negotiations in Washington have continued as government leaders seek to ensure the country's debt ceiling is increased before an Aug. 2 deadline. Meetings appear to have ground to halt in recent days amid partisan bickering between Democrats and Republicans about how to cobble together a deal that both sides can live with.
Moody's on Wednesday said the ratings action was prompted by the possibility the debt limit will not be raised in time to prevent a missed payment of interest or principal on outstanding bonds and notes. As such, Moody's wrote there is "a small but rising risk of a short-lived default."
Moody's said an actual default, regardless of duration, would fundamentally alter the agency's assessment of the timeliness of future payments, and that the Aaa rating would likely no longer be appropriate. However, because that type of default would likely be short-lived, the rating would most likely be downgraded to somewhere in the Aa range, Moody's said.
If the debt limit is raised again and a default is avoided, the Aaa rating would likely be confirmed. Moody's did note the outlook assigned at that time to the government bond rating would very likely be changed to negative at the conclusion of the review unless "substantial and credible agreement is achieved on a budget that includes long-term deficit reduction."
The warning for a possible downgrade comes after Standard & Poor's Ratings Services in April cut its outlook on U.S. government debt to negative from stable for the first time in history, citing ongoing concerns over the long-term fiscal health of the nation.

Anyone thinking long term profits in shorting the currency??

[Gee]

They have downgraded Ireland too, which will have a flow on effect.

I don't know about long term profits. The downgrade should only be temporary, but there may be a window there if you have the capital and leverage.