S&P THREATENS DOWNGRADES OF THE FINANCIALS

http://finance.yahoo.com/news/SP-threatens-broad-downgrade-rb-1761317270.html?x=0&sec=topStories&pos=1&asset=&ccode=
NEW YORK (Reuters) - "Standard & Poor's on Friday raised the pressure on Washington debt negotiators, saying it could downgrade insurers, securities clearinghouses, mortgage agencies and a laundry list of other firms if there is not a deal soon to lift the debt ceiling and cut the deficit.
While S&P had already made clear it could downgrade the United States's sovereign credit rating, the move Friday struck directly at the heart of the financial system, raising the prospect of knock-on effects should the country exhaust its ability to borrow to pay bills.
The Treasury took the last available step Friday to try and extend that borrowing capacity.
The ratings agency on Friday put on negative credit watch a range of powerful financial firms, many of them little known to the public but crucial to the nation's financial infrastructure. government securities are central to the operations of most of the companies cited.
They include the Depository Trust Co, which facilitates payment transfers among major banks, as well as several Federal Home Loan Banks and Farm Credit System Banks. They also singled out Fannie Mae, Freddie Mac, the two agencies central to the U.S. residential mortgage market.
S&P characterized its targets as "entities with direct links to, or reliance on, the federal government."
Separately, the agency said the four remaining U.S. nonfinancial companies with "AAA" ratings were not affected by the downgrade threat."