They’re gonna downgrade their outlook from stable to negative though, just in case. [WSJ]
“Moody’s Investors Service downgraded six European nations and became the first ratings firm to warn the U.K.’s rating could be at risk, citing the area’s weakening ability to implement measures aimed at reducing debt…Where Moody’s did deviate from recent actions by other ratings firms was in changing the outlook for the U.K. There had been no indication the U.K.’s outlook was necessarily in danger based on how other ratings firms view U.K.’s debt. Both S&P and Fitch have a stable outlook on their U.K. rating.” [WSJ]
Three weeks ago, Egan-Jones Ratings Co. downgraded America. Almost no one paid attention. “S&P’s downgrade was on the front page of every newspaper,” said Sean Egan, president of the Haverford, Pa., ratings firm, which has been issuing ratings since 1995. Mr. Egan’s disappointment that Standard & Poor’s rattled the world with its Friday-night rating cut on long-term U.S. government debt to double-A-plus, from triple-A, while his identical move was essentially ignored, is a sign of the grip on the debt-ratings industry held by its three giants. [WSJ, earlier]
As you may have heard, Standard and Poor’s knocked the US’s debt down to double-A plus from triple-A Friday evening. Several hours before it was made official, the ratings agency was notified their team had made some calculation errors but chose to say “fuck it, on with the downgrade.” This made a whole bunch of people very upset, including Treasury Secretary Tim Geithner, who commented S&P demonstrated “really terrible judgement, handled themselves poorly, showed a stunning lack of knowledge about basic US fiscal budget math, and…came to exactly the wrong conclusion” and Warren Buffett, who shared that he could not give less of a rat’s ass what S&P thinks, that he’s “not changing his mind about Treasurys based on the downgrade,” that “if anything, it may change my opinion on S&P,” and that the United States’s debt is like that of the first buxon milkmaid he laid his eyes on 70 years ago today- her tits may be down on the ground now but they’ll always be triple-A rated in his mind and that’s all that matters.
A slightly different reaction came from PIMCO CEO Bill Gross. He loved the downgrade and if we’re being really honest? It earned S&P some respect in his eyes, ’cause it showed the ratings agency has balls. Read more »