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Who in the World would trust Standard and Poor's?

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The Connecticut Attorney General issued the following statement after filing the complaint against S&P:

"We are holding the credit rating agencies accountable for a secret Wall Street tax on Main Street"

"All three credit rating agencies systematically and intentionally gave lower credit ratings to bonds issued by states, municipalities and other public entities as compared to corporate and other forms of debt with similar or even worse rates of default, Blumenthal alleges" Richard Blumenthal, Connecticut Attorney General, July 30, 2008 (Blumenthal is now governor of Connecticut)

Section V of the complaint, referenced in the heading above, teaches us something about how S&P treats government entities.

"Since at least 2001, S&P has known that it underrates public bonds as compared to corporate bonds and that this policy costs public bond issues money in the form of higher interest costs or unnecessary bone insurance costs. Despite knowing these facts, S&P continued to represent that its credit ratings are on the same scale, that public issuers have the same credit risks as similarly rated corporations, and that public bond issuers with lower credit ratings have a greater likelihood of not paying their bonds than a bond issuer or corporate bond issuer with a higher credit rating. These knowingly false representations harm public bond issuers when the buy bond insurance based on their own ratings and bond buyers who consider S&P's credit ratings when deciding to purchase public bonds." (Author's emphasis) State of Connecticut v. the McGraw Hill Companies (p. 12)

Here's a credit firm that takes money from local governments and citizens by issuing ratings it knows are flawed. This is the same credit rating firm wielding major influence on the US budget process. There is no doubt that S&P's influence will work against the interest of citizens.

The math error should be thoroughly examined.  If the White House is right, S&P can withdraw their rating.  If it's not, the critique and attack on S&P credibility needs to be met at a very high level  Paul Krugman has already begun.  Others should follow.  These people have no right to impact US economics and politics in any way, let alone one that has a major influence.

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They are even worse than I thought.Outstanding bac... by Dante DeNavarre on Saturday, Aug 6, 2011 at 1:06:35 AM
The Levin committee on the 2008 crash names S&... by Michael Collins on Saturday, Aug 6, 2011 at 1:22:22 PM
In a class action for damages but I don't know any... by BFalcon on Saturday, Aug 6, 2011 at 9:17:53 PM
Obomber administration for their bribery induced A... by bogi666 on Saturday, Aug 6, 2011 at 7:29:12 AM
You make a good point.  Insider trading shoul... by Michael Collins on Saturday, Aug 6, 2011 at 1:28:43 PM
As has been stated before, the ratings agencies ar... by intotheabyss on Saturday, Aug 6, 2011 at 8:55:20 AM
Indictment and prosecution for the perpetrators!&n... by Michael Collins on Saturday, Aug 6, 2011 at 1:32:24 PM
Wishful thinking, maybe, but we need to petition O... by Dante DeNavarre on Saturday, Aug 6, 2011 at 3:56:25 PM
it is hard to trust them agian.... by poks her on Saturday, Aug 6, 2011 at 9:16:04 AM
The system broke itself.  It cannot be put ba... by Michael Collins on Saturday, Aug 6, 2011 at 1:34:22 PM
I'm with you Michael and fully agree. At issue is ... by Elizabeth Hanson on Saturday, Aug 6, 2011 at 1:41:54 PM
The state and local banking processes are a nice a... by Michael Collins on Sunday, Aug 7, 2011 at 12:26:50 AM
dysfunctional purposely by the Repubicans. Mitch M... by bogi666 on Saturday, Aug 6, 2011 at 2:22:45 PM
Christina Romer former Chair of the Council of Eco... by Robert Wolfe on Saturday, Aug 6, 2011 at 1:45:26 PM
Excellent article Michael. I believe that Standard... by Howard Schneider on Saturday, Aug 6, 2011 at 2:01:00 PM
They do need to be investigated.  There's a g... by Michael Collins on Sunday, Aug 7, 2011 at 12:18:54 AM
Antitrust Review In November 2009, ten months afte... by Daniel Geery on Saturday, Aug 6, 2011 at 2:49:47 PM
S&P unfair and monopolistic practices, no way;... by Michael Collins on Saturday, Aug 6, 2011 at 4:47:52 PM
S&P unfair and monopolistic practices, no way;... by Michael Collins on Saturday, Aug 6, 2011 at 4:48:39 PM
The Patriot Act, Section 802: A person engages in ... by Robert Wolfe on Saturday, Aug 6, 2011 at 5:22:24 PM
Valuable information and analysis!... by Michael Collins on Sunday, Aug 7, 2011 at 12:33:21 AM
Standard and Poor;They do NOT adhere to any known ... by Arend Rietkerk on Saturday, Aug 6, 2011 at 7:00:41 PM
"Trust" has been transformed into meaning "What's ... by Marika on Sunday, Aug 7, 2011 at 2:37:40 AM
"With the failure of the electoral system, the leg... by Nancy Lewis on Sunday, Aug 7, 2011 at 7:58:53 AM