Well, you sure as shit nailed this. The American consumer is leveraged to the hilt. The entire American economy is built on debt. Savings? What's that? No one saves, the government just prints more and the American consumer borrows and when they can't pay off their debt they borrow more. It's a big house of cards that's about to come crashing down. The Fed is doing their best to stop it, and they may for now, but eventually if the debt isn't worked out of the system and brought down to reasonable levels the American economy will collapse and take the rest of the world with it.
I'm not letting them off the hook but they ARE largely just dancing to the tune that our "betters" have called. We're a consumer society that produces nothing but paper shuffling and the people who get paid $100 million or more per year to shuffle the paper have completely fucked it up by creating a level of fraud and corruption that would shock Al Capone.
+ it is tough to value a company when the numbers have been manipulated to the point you don't know what is correct.
an interesting twist to these latest downgrades is that the credibility of just about all ratings agencies has been crumbling over the past 6 months...thus the market's reaction may be more complex than just a knee jerk selloff
The market is looking for "excuses" to retest the lastest lows. From there I see stabilization or an up move (but I will wait and I see until this is confirmed before putting money in for the long side). Typical bear market behaviour...