Choas After S&P Downgrades

14:00 EDT US Markets are feeling the full force of a Standard & Poors downgrade of CDO (Sub-Prime lending debt) and the possible impact of the US housing woes on the economy. The S&P lowered ratings not just in the US recently but also on European Collateralized Debt Obligations in a sweeping move that forces Investment Funds to re-align holdings as per the strict guidelines on the debt ratings of their portfolios. The yield on 2 and 10 year Treasury Notes declined dramatically as the effects of the downgrades took place. Lower yields equates to lower interest rates, and lower interest rates equals a lower value $.