In finance and investing, Black Monday 2011 refers to August 8, 2011, when US and global stock markets crashed[1] following the Friday night credit rating downgrade by Standard and Poor's of the United States sovereign debt from AAA, or "risk free", to AA+.
U.S. President Barack Obama attempted to calm the markets during trading in a speech from the White House, but the DOW lost 200 more points within 20 minutes of it concluding.
Supporters of the Tea Party movement pushed Republicans to reject any agreement that failed to incorporate large and immediate spending cuts or a completed balanced-budget constitutional amendment.
After the legislation was passed by both the House and Senate, President Barack Obama signed the Budget Control Act of 2011 into law on August 2, the day of the deadline.
Instead, following the downgrading of US sovereign debt, as well as the Fannie Mae and Freddie Mac government-backed lenders by Standard and Poor's from a AAA to a AA+ rating, the global stock markets experienced a prolonged period of heightened selling activity ultimately resulting in the crash of Black Monday 2011.