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World Week Ahead: Reaction to the Credit Downgrade; Afghanistan Helicopter Probe

World markets took a tumble Monday after the United States received a credit rating downgrade Friday night, and the investigation continued into the downing of a U.S. military helicopter in Afghanistan over the weekend.

WORLDWIDE MARKETS | Stocks fell while bonds rallied after credit rating agency Standard & Poor’s downgraded the United States one step from a triple-A to a AA+ rating Friday evening.

The downgrade wasn’t entirely unexpected; the agency had put the United States on a credit watch in July while Congress was debating raising the nation’s debt ceiling.

Wayne Arnold, an Asia strategist and Breakingviews columnist for Reuters who is based in Hong Kong, said markets likely would continue to be rocky this week as people digest what the implications of the credit rating downgrade are.

“There’s a lot of speculation that this might cause a great unraveling in credit markets, but I don’t think that’s going to be the case,” he told us Monday morning. “There have been a lot of statements already over the weekend from central banks around Asia expressing support for U.S. treasuries and basically confirming what people had realized two weeks ago that the rating doesn’t really matter when you’re talking about how to manage and where to invest $10 trillion in a global foreign exchange reserves.”

While Arnold said he didn’t expect a massive selloff in U.S. treasuries by Asian central banks, the downgrade could accelerate efforts to try to find alternatives to the dollar and U.S. trade and alternative places to put their accumulated surpluses, he said.

We’ll have more analysis here on the Rundown and on the NewsHour broadcast. We’re also following developments in:

AFGHANISTAN | The investigation and recovery effort of a CH-47 Chinook helicopter — reportedly shot down Saturday in the central-eastern province of Wardak, Afghanistan — continued Monday.

The Taliban took credit for the attack, which was the single deadliest incident for U.S. forces since the war began 10 years ago. NATO’s International Security Assistance Force said the helicopter was fired on “by an insurgent rocket-propelled grenade while transporting the U.S. service members and commandos to the scene of an ongoing engagement,” Reuters reported.

The operation was an ISAF search for a Taliban leader in the Tangi Valley area in central Maidan Wardak province, 50 miles southwest of Kabul, officials said.

NORWAY | Psychiatrists reportedly are set to begin their evaluation of Anders Behring Breivik, the man accused of the July 22 shooting spree at a youth camp and car bombing in Norway.

We’re planning to interview Norwegian Foreign Minister Jonas Gahr Stoere on Friday’s program.

BERLIN WALL | Also Friday, we’ll remember the start of the construction of the Berlin wall separating East and West Germany on its 50th anniversary by replaying a 2009 audio interview with Robert MacNeil, who covered the events leading up to the erection of the wall as a reporter for NBC News.

Photo of CH-47 Chinook helicopter in Afghanistan in 2009 courtesy of Defense Department.

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