Why Does Standard & Poors Hate America?

All the downgrades by Standard & Poors seem a little….I don’t know…over the top.

If Warren Buffet calls you out for doing it, I think there’s something a little strange going on, no?  (S&P responded to this by lowering the credit rating on Berkshire Hathaway, which just proves even more that S&P is on some big out-of-control-nothing-based-on-reality kick.  I mean, really?)

Seems to me that S&P is getting a little anti-American these days.  Which is strange to me because the first thing their Wikipedia entry says is that they are a “United States based” financial services company.

Who apparently hates America.

Do they really think that America is going to walk away from their debt? First and foremost, that’s not going to happen.  Second, that’s not going to happen!

If the question is, does America have too much debt, then the answer is yes.  But, here’s the problem.  Credit ratings have nothing to do with that.  I repeat.  They have absolutely nothing to do with that.

It’s about whether we can pay it back.  That’s the start and finish of what the credit ratings mean.   And there has been no reason to think that we wouldn’t be able to.

Until today.  Or last Friday, to be technical.

I don’t know.  I find it strange.  Here’s what I think should happen:

  1. The SEC should immediately investigate anybody and everybody remotely associated with Standard & Poors.  If anybody shorted the market or went into cash over in the last several weeks, they need to be investigated.  Hard.  It seems to me that someone out there is getting rich off this and it’s not Joe Public.
  2. Let’s call the S&P 500 just ‘The 500’ from now on.  Just cuz anything to do with the name S&P pisses me off right now.
  3. Americans should mail S&P their financial statements.  If we all sent our 401(k) statements before-downgrade and after-downgrade to them with a little ‘Thanks for this’ note, do you think anybody there would get the hint?  After all, pretty much everybody  who invests in their company 401(k) plan got screwed (read: most of the middle class).  Let them see how.

America has a debt problem.  We have way too much of it and there’s no end in sight.  But, there’s a right way and a wrong way to do that.  One of the wrong ways is to elect the same turds over and over again.  Another wrong way is for an agency to overstep their bounds, fiscally and politically, and get involved in something they have no business being involved in.

Don’t we have enough people in Washington already trying to screw us?  At least we can vote them out.  All we can hope for the S&P folks is that they pick up shop and move somewhere else.  Why wouldn’t they?  After all, they do seem to hate America.

4 thoughts on “Why Does Standard & Poors Hate America?”

  1. I think America has too much debt and too much of our economy is funded with public sector jobs.

    I hope it serves as a wakeup call to have elected officials actually, you know, get some work done, instead of bickering, pandering and getting nowhere.

    I would never buy stock in a company that was run like the US government. i don't think it was totally unwarranted.

  2. I think that the downgrade has a lot to do with our political struggles to raise the debt ceiling – the issue is not whether the U.S. *can* pay their bills, it's whether they (the politicians) would choose not to.

    S&P ratings was wrong about the companies that collapsed in the mortgage crisis, but they can't ignore the U.S. government's turmoil simply because it would be pro-American to keep rating them AAA. Then the rating would mean nothing!

    As it is, the rating is still just one step below perfect, and the world in general knows that U.S. treasury bonds are still a very safe place to put money.

  3. I agree with Kellen. I don't think anyone actually believes the US isn't a good place to invest, isn't a good credit risk. The problem isn't our economy, its our politics.
    Politicians (on both sides of the aisle) decided to play politics for this latest raising of the debt ceiling. They put posturing above good custodianship. That's what S&P is responding to.

    Think of it this way, if you loaned a couple some money, and then later witnessed them having a very loud, very public argument about whether or not to pay you back- not that they couldn't afford to pay you back, but that one didn't want to send you any money until the other had done something they wanted. Suddenly, it doesn't matter how much money they have, or what ability they have to pay you back. They are holding the money they owe you hostage to their relationship problems.
    My guess, you're not likely to want to loan them money again, or if you do, you're going to want a slightly higher premium.

    And that's what Congress just did. They had a very loud, very public fight, with the implied threat that even though we could pay our creditors, maybe we weren't going to. Our creditors (and the people our creditors look to to monitor this type of thing) have every right to be a bit more wary of lending to us in the future – especially since one side threatened to do the same type of thing again, should debt ceiling talks ever come up again.

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