I'm Not Saying It's a Stunt, But....

My guess is that if you want to truly understand the S&P downgrade of U.S. debt, you would have to consider two things:

1. Primacy: Nobody will pay much attention to the second bond rating agency to pull this type of stunt, er, I mean to carefully reassess the risks associated with U.S. debt.
2. Profits: Wanna bet that more than a few S&P insiders made some investment decisions on Friday in anticipation of the downgrade announcement on Saturday?

Perhaps the U.S. government should figure out how it can pay for ratings, so it can be as accurately as the proprietors of those AAA mortgage-backed securities that turned out to be toxic. Seriously, I can understand being concerned that the U.S. won't get its act together, or that "Tea Party" Republicans will confuse this type of stunt with actual policy and trigger a default. But if bond ratings are supposed to be about the safety of your money, where would S&P have us put our money? I mean, albeit way late, even S&P figured out that those mortgage-backed securities were a bad deal, and we can't all put our money into UM.

Truth be told, and S&P must be aware of this, if the markets believed that the U.S. was truly going to default on its debts we would have seen panic in the market prior to the announcement and passage of the final deal. It may sometimes involve choke chains, but the Republican leadership knows the price it will pay if it allows the idiots in its ranks to actually force a default - whatever reward the Tea Partiers imagine that they might reap at the polls, the party would be severely punished by the deep pocketed contributors who bankroll their campaigns - and thus their actual agenda.