Understandable: blame the politicians
Predictable: blame the republicans
Adolescent: blame the messanger (S&P)
Ultimately: blame ourselves
Are we looking at the failure of democracy, where we vote ourselves unsustainable largesse until the system crashes?
Quoting FT Alphaville...
Indeed, the Federal Reserve announced late on Friday that risk weightings would not be affected. Not much surprise there.
It’s all about the collateral, and the deposit crisis, remember.
The US is still, of course, rated AAA by Fitch and Moody’s — the good and the bad to S&P’s ugly. A split rating should mean fewer knock-on impacts. And as Martin Wolf always tells us — and anyone within earshot — credit rating agencies provide absolutely zero new information about US treasuries. It’s the linkages and the contagion (the horror! the horror!) that matter.
Therefore, we guarantee some European-style political bloviation, especially given the palaver over the maths, but the tangible impact remains unclear.
Still, feels like a big deal, no?