SpicyTricks

Geithner
spoke in a television interview late Sunday as G7 central bankers and
financial chiefs pledged to take "take all necessary measures" to
support financial stability and growth in the wake of a Eurozone crisis
and the US credit downgrade.

But Standard and Poor's managing
director warned of possible further downgrades if Washington fails to
get its fiscal house in order.



"If the fiscal position of
the United States deteriorates further, or if the political gridlock
becomes more entrenched, then that could lead to (another) downgrade,"
S&P ratings head John Chambers told ABC television.

Stocks
tumbled in Asian markets Monday. Tokyo shed 2.16 percent in the
afternoon, Hong Kong shed 4.04 percent by the break, Sydney fell 1.96
percent and Singapore dived 4.61 percent, while Seoul sank 6.3 percent
and Shanghai lost 3.68 percent.

Standard and Poor's stunned
Americans on Friday when it lowered the credit rating for US Treasures
for the first time ever from a sterling AAA to AA+, pointing to the deep
divisions in Washington over its long-term fiscal standing.

"I
think S&P has shown really terrible judgment and they've handled
themselves poorly, and they have shown a stunning lack of knowledge
about basic US fiscal budget math, and I think they came to exactly the
wrong conclusion," Geithner said.

Geithner used the interview with
NBC News and CNBC to assure investors that the US economy remains
strong and resilient despite the political battles in Washington, and
that US Treasuries were as safe as ever.



"There is no risk the United States of America would ever not be in a position to meet its obligations," he said.

A
deal reached by Congress to cut some $2.5 trillion over 10 years in
exchange for raising the congressionally-set debt ceiling fell short of
the S&P's call for the United States to cut $4 trillion over the
same period.

US lawmakers, meanwhile, spent the day blaming each
other for the credit downgrade, with some Republicans calling for
Geithner's resignation.

But the White House said Geithner would
stay on at Treasury, ending speculation that he would leave after two
and a half years on the hot seat during a period that saw the US economy
plunge into the worst recession since the Great Depression.

Former
US Federal Reserve chairman Alan Greenspan, speaking earlier on NBC,
said he believes the markets will react negatively to the downgrade and
that it's "going to take a while to bottom out."



Greenspan, however, said that US Treasury bonds are still a solid investment.

Obama's
former top economic advisor Larry Summers, appearing on CNN's "State of
the Union," attacked the S&P downgrade as an unwarranted piling on
atop an already weak economy.

Summers said the country could pay
its bills, and repeated the administration's allegations that S&P's
decision to downgrade was linked to a $2 trillion accounting error and
its use of a faulty baseline.

In an early vote of confidence from
Tokyo, Finance Minister Yoshihiko Noda on Monday said that Japan -- the
second largest holder of US Treasury bonds after China -- will continue
investing in US Treasuries despite the downgrade.

In Beijing,
however, China's official Xinhua news agency said in a commentary that
US politicians need to stop blaming each other over the downgrade and
find solutions.

"The alarm has rung. It is time for the naughty
boys in Washington to stop chicken games before they cause more
damages," it said.

The Chinese government has yet to comment publicly on the downgrade.

As of late June, China sat on the world's biggest foreign exchange reserves of around $3.20 trillion.



Meanwhile, Democratic and Republican lawmakers continued the finger pointing Sunday over the downgrade debacle.

Democratic
Senator John Kerry described it as a "Tea Party downgrade," referring
to the ultra-conservative anti-tax movement, and said a debt deal
reached after weeks of heated negotiations fell short because some
Republicans "were willing to shoot the hostage."

"What we need is a Washington that stops this bickering," Kerry told NBC's "Meet the Press."

Republican Senator John McCain, also appearing on NBC, blamed Obama, saying he had failed to put forth a specific debt plan.

"I agree that there is dysfunction in our system, but a lot of it has to do with the failure of the president to lead," he said.