Paul Krugman does a great job pointing out S&P’s chutzpah in downgrading U.S. debt:
America’s large budget deficit is, after all, primarily the result of the economic slump that followed the 2008 financial crisis. And S.& P., along with its sister rating agencies, played a major role in causing that crisis, by giving AAA ratings to mortgage-backed assets that have since turned into toxic waste.
Nor did the bad judgment stop there. Notoriously, S.& P. gave Lehman Brothers, whose collapse triggered a global panic, an A rating right up to the month of its demise. And how did the rating agency react after this A-rated firm went bankrupt? By issuing a report denying that it had done anything wrong.
Limerick Ode To Standard & Poor’s Chutzpah
By Madeleine Begun Kane
Dear Standard & Poor’s, I’m impressed
Cuz you ought to be under arrest.
You caused the recession
With junk bond aggression.
Now you’re pounding your downgrading chest?
