On the one hand, we have the analysts, economists and editorials downgrading Standard and Poor's ability to rate anything above a used car. And on the other, investors are fleeing, and I don't use that term lightly, the stock market and sinking their reserves into the very thing that S&P is downgrading, bonds. So, it's pretty safe to say that today's market plunge is less about the downgrade and more about skiddish market sentiment running amuck on a possible recession. 

When S&P released the downgrade announcement on Friday, everyone must have rolled their eyes and continued their already frantic pace selling off stocks. That's how I pictured the scene. S&P's downgrade was expected, with Fitch and Moody's rating agencies still holding on to their cheerleader status on US debt. The chatter today is saying the downgrade is more a rip on U.S. politics, than the government's ability to pay. 

S&P's exact words were, "The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy"

Someone remind me, where exactly do the ratings agency fall in the whole check and balance scheme that we learned about in 8th grade social studies?

Regardless, the inevitable blame game ensues. Politicians point their fingers at each other and then at the rating agencies. Not that's its not deserved. The agencies' biggest sin to date is supporting the mortgages-backed-debt that pushed this economy off the ledge. So why are they still determining what's worth buying? And why are we still listening? If not them, than who will we listen to? China?


Next time, we're hopping back over the pond with France's possible downgrade on the horizon. Merci.