After Friday's close the credit raters at the S&P downgraded their ratings of US government debt securities from AAA to AA+.
I think the S&P rating folks are imbeciles and don't deserve to be taken seriously by adults. Why?
1. Their understanding of real estate economics led them to rate the vast majority of mortgage backed securities AAA back in 2005-07. This alone should be sufficient to destroy their credibility among thinking people.
2. Their downgrade of the US is based purely on predictions of what the politicians will or won't do. I find it hard to believe their political forecasts are better than their real estate forecasts.
3. As I have often pointed out it is impossible for the US to default on debt servicing and repayments. We borrow in our own currency which we can print at will.
4. RE 3. - If the world was worrying about US failure to repay why have treasury securities been rallying the past week as investors flee to quality?
