In obvious retaliation for downgrading the US, the Department of Justice has decided to put together an investigation to hunt for a witch called Mortgage Ratings! If this doesn’t make you laugh, you may need a clue! Yes, it isn’t funny in one sense but it’s still laughable. Do we need to “take a look” at what we already know? Don’t we already know the problem with past mortgage ratings? Don’t we already know the markets were manipulated, potentially by friends of Congress and Wall Street? Don’t we know that S&P likely reported based on lies told to them, maybe even by Congress? We can already answer these questions without taxpayer funds to cover a big worthless investigation designed to either create scapegoats or put S&P down. Maybe S&P will have a Howard Hughes moment in front of Congress or the Department of Justice.
To reiterate, S&P is one of the very best rating agencies, and most people have not heard of the others. S&P has done a great job for many, many years and through some very bad years of government.
This simply appears like a “gangland” style of attack by a government which may want to tell its citizens what to do and how to think. If they had their act together, then they wouldn’t need to worry about their rating. Should we just maintain a AAA rating without ever discovering excesses in government-run financial programs? Who investigates them?
At the end of the day, all this action does is serve to reduce confidence in an already volatile market and economy.