when moody's or s&p talk about devaluing US AAA rating are they threatening something?

lxlxlxl

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Wed Apr-07-10 05:50 PM
Original message

when moody's or s&p talk about devaluing US AAA rating are they threatening something?

because these same agencies have proven over and over that what they do is based on what people pay them to do. They evaded serious consequences during Enron, and pushed phony ratings throughout the subprime boom. They give great ammo to rightwingers (like Scarborough this morning) whenever they threaten govmt bond ratings, but i dont think the country cares. everytime i see those headlines (like i did during the election) i always think they are a threat...not the reasoned analysis they pretend to be.

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cutlassmama

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Wed Apr-07-10 05:52 PM
Response to Original message

1. Moodys is in the U.S. It has bite if they are talking about foreign countires, but

none if they are talking U.S.

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tularetom

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Wed Apr-07-10 05:59 PM
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2. Lay off us and don't criticize our practices or we'll downgrade your government bonds

and make you pay more interest to borrow money which will cost the taxpayers and further fuck up the economy.

We do this because we are patriotic.

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RM33

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Wed Apr-14-10 07:10 PM
Response to Original message

3. It does not matter because

if Moody does not downgrade the US AAA rating, then the market will do it for them. The bond market is smart enough to know when a country has borrowed to much and reach the tipping point. They don't need a credit agency to tell them that.

And when the market decides it has had enough, then you will see all the same effects as thou Moody had yelled "the emperor has no clothes."

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