Krugmans has an interesting point ...

S&P declared that US debt is no longer a safe investment; yet investors are piling into US debt, not out of it, driving the 10-year interest rate below 2.4%. This amounts to a massive market rejection of S&P’s concerns.

http://krugman.blogs.nytimes.com/2011/08/08/aaauuuggghhh-market-commentary-edition/

Seems the market nose dive is a good, safe haven in buying up those S&P rated toxic US government T-bills for investors looking to park their money in a safe port to weather out the storm.

I believe he's also arguing the US debt issue isn't driving the markets ... it's investors' refocusing on the economic fundamentals and have come to the conclusion the GOPer's are driving policy in Congress. They've locked themselves into a firm position of unwavering denial the government is the only financial resource capable of turning the economy around. Instead, they have left that task for Wall Street to work out on their own with the promise of future tax breaks and easing of regulations to grease the wheels of business at a later date. So any savvy investor wouldn't have the slightest hesitation in pulling their cash out and sticking in a lockbox that's resistant to the market upheavals.

I wonder just how far the markets will have to fall before the GOPer's see the errors of their ways? Of course, it's all Obama's fault ... he purposefully manipulated this event just to make fools out of tea-baggers and GOPer's.