anybody got any ideas on how to trade bonds should a US s&p downgrade come? my thoughts are that the US bond market will remain the market of choice and in the end a downgrade would mean very little but the first couple weeks could be crazy.

the fact is that the US bondmarket trades about $1/2 trillion dollars worth a day. germany and england only about $30bil. so i dont think a mass exodus is even possible but the few "dumb money" funds that would leave would really jack up the price of german bunds/english gilts quickly. it wont take folks long to realize there is no liquidity in other markets and the foriegn yields will go to hell.

any thoughts?