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.
In truth, the Perpetrators--those that brought the markets down--have turned the tables on the Errants- those that neglected their fiscal duty--with a remarkable cleverness that S&P never before revealed. This is the same S&P who missed the complexities of the CDOs and MBS (mortgage bonds) directly under their review!
But none of this is really the main issue. The real issue is that S&P's obvious political game has serious human dimensions. Namely: our global economic system has just been thrown under the bus. The Republican-Democrat pas de deux that has been so frustratingly performed in front of the world stage as we reported at Good-b last week gave S&P the ammunition. Would Congress do the unthinkable and refuse to pay our obligations asked those watching?