Credit ratings agency Standard & Poor's threw a monkey wrench in the works by downgrading its long-term credit rating for the U.S. from AAA to AA+, just days after President Obama signed a debt-limit compromise.

The controversial downgrade has evoked worldwide angst, with China -- the largest foreign holder of U.S. debt -- demanding that the nation confront its "addiction to debts," state-run news agency Xinhua reported.

S&P cited the federal budget deficit and a political logjam over measures to deal with the U.S. debt crisis as the key reasons behind its decision.

The report of an S&P downgrade roiled markets. In Asia overnight, Japan's Nikkei index declined 2.4 percent, South Korea's Kospi fell five percent and Hong Kong's Hang Seng was down by four percent.

S&P, however, has received criticism from many corners regarding the timing of the downgrade.

Economist Nouriel Roubini, whose economic views have earned him the nickname Dr. Doom, questioned S&P's decision to downgrade the U.S. debt rating.

In a Financial Times article, Roubini said the downgrade has further increased the possibility of a double-dip recession and a larger fiscal deficit. Excerpts of his discussion on the downgrade posted on his blog state some reasons why S&P downgraded the U.S. debt. Roubini said that S&P was under pressure from a number of European countries which had been downgraded, and thus were demanding why their debts had been downgraded and not U.S.

Billionaire investor Warren Buffett maintained his stance on U.S. Treasuries, adding, "If anything, it may change my opinion on S&P," according to a CNBC report.

Buffett, commenting on why Berkshire Hathaway has continued to buy T-bills despite the drop in yields said: "I wouldn't dream of putting it anywhere else."  He added: "If I have to buy (Treasuries) at a zero percent yield, I will, I don't like it, but we'll do it."

Buffett's Omaha-based company is one of the biggest shareholders in S&P's main competitor Moody's Corp., according to The  Associated Press.