S&P: The Genius of a Flexible Conscience
In case you had not heard, America’s very own Benedict Arnold, rating agency Standard & Poor’s, downgraded the United States credit from Triple A to Double A in an act of sheer fiscal and political recklessness. The price of credit has just become substantially more expensive at a time when low cost credit is surely the best cure.
That they could do worse than they have already done this past decade is astonishing. But kudos to S&P for showing that they have a spine…even if it is attached to a tail.
Rating agencies have come under fire since the mortgage market meltdown in 2008 primarily due to their major role in bringing about the debacle. To jog the memory, S&P along with Moody’s and Fitch based their solid credit expertise and stellar reputations on whichever client paid the most for their services. Standard & Poor’s was one of the key players in the mortgage securities crisis by giving AAA ratings to any junk bond that came along with a handsome fee attached.
In the ultimate irony, the Show-Me-the-Money S&P star now stands as the credit judge of the largest economy in the world. Just goes to show that big power in the hands of small people is seriously…well small.