Revenge of the Absurd: U.S. Sues S&P
NEW YORK (Bullion Bulls Canada) -- On Feb. 5, we learned something. We learned precisely how long of a memory span that the U.S. government believes Market Sheep to possess: 18 months.
How do we know this? Because 18 months to the day after credit-rating agency Standard & Poors announced it had downgraded the U.S. government's (fraudulent) "AAA" credit rating, the U.S. government has announced its revenge .
It is suing S&P for "inflated credit ratings" which, according to U.S. Attorney General Eric Holder were "central to the worst financial crisis since the Great Depression." Fans of either the ironic or absurd are warned at this point that reading further carries a direct risk of becoming dangerously over-stimulated.
Those at all familiar with our markets or general economic reporting know there are three behemoths who currently dominate the credit ratings business (Moody's and Fitch being the other two), and at the time when S&P committed its alleged transgressions they were essentially the exclusive sources for credit-rating data in the U.S. economy and its markets.Today, only one of those three corporations is being sued; the one which (by remarkable coincidence) happened to downgrade the credit rating of the U.S. government exactly 18 months earlier. For the many readers out there who are believers in "remarkable coincidences" (and who thus disregarded the previous sentence), undoubtedly you are all telling yourselves the same thing: S&P was doing something different/more nefarious than the other credit ratings agencies. Let's see what the lawyers representing S&P have to say about precisely that point:
We will vigorously defend S&P against these unwarranted claims . . . The fact is that S&P's ratings were based on the same subprime mortgage data available to the rest of the market -- including U.S. government officials who in 2007 publicly stated that problems in the subprime market appeared to be contained . . . "Let me expand on that statement, because truly S&P could have said much more. When the S&P spokesperson stated that "S&P's ratings were based on the same subprime data," she could have easily added that the ratings themselves were virtually identical to those of the other two ratings agencies; and their "analysis" of market conditions was so similar it was if all three were reading off the same script. So we have three trusted institutions all reading off of the same "don't worry, be happy" script, yet only one of the three is being attacked as a Villain. Who wrote the script for the ratings agency choir? Why, the U.S. government, of course -- now playing the role of the Aggrieved Victim.
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