James Kwak at Baseline Scenario offers a great analogy and explanation for why the whole concept of a private rating agency such as Standard and Poor's putting a credit rating on government bonds is absurd. It adds no new information. Now if S&P wants to rate the Greater Podunk Water Authority bonds or some such, … Continue reading Why the Whole Idea of “Rating” Government Bonds is Absurd
The S and P Downgrade Decision Stinks of Politics and Corruption.
Yves Smith at Naked Capitalism (an unusually good source of very in-depth, timely commentary) offers some strong evidence and analysis of how the S&P decision to downgrade the U.S. debt stinks. I've already talked about how it's really irrelevant at the economic level and how it's not likely to change things substantially. I've also written about how … Continue reading The S and P Downgrade Decision Stinks of Politics and Corruption.
S and P Throughout History
For a little fun, check out what people have been saying on Twitter about S&P's ratings and predictions throughout history at #StandardAndPoorsThroughoutHistory. My favorite: That is much too big to be a space station, must be a moon. AAA rating for Alderaan #StandardandPoorsthroughoutHistory UPDATE: From Remapping Debate:
S and P: Not the Best Judge of Credit-Worthiness
The media and the talking heads will no doubt make a big deal about S&P downgrading the U.S. debt from AAA to AA and threatening to go to A in 6 months. But it's really nonsense. The U.S. it is not possible for a sovereign nation with it's own currency, it's own central bank, and … Continue reading S and P: Not the Best Judge of Credit-Worthiness
U.S. Government Debt Downgraded by S&P. What a Farce. And Non-Issue.
Yesterday after the U.S. markets closed, Standard & Poor's downgraded their credit rating on U.S. government bonds. Previously, the U.S. government had enjoyed for over 70 years the highest possible rating: AAA. Now it is "only" going to be AA+. We should note that the other two major bond-ratings agencies, Moody's and Fitch's still rate … Continue reading U.S. Government Debt Downgraded by S&P. What a Farce. And Non-Issue.
On S&P and Government Creditworthiness
Standard and Poor's, one of the big bond rating agencies, has announced today that they are giving a "downgrade warning" on U.S. government bonds. Not a downgrade in credit rating, but just a "warning" that things could be downgraded. Ho hum. Such theatre. As if we should believe S&P. First, a sovereign currency-issuing government with … Continue reading On S&P and Government Creditworthiness