|Hey, just kidding... |
Everybody knows he is an honourable man!
(Image couretsy of iMaksim.com)
One might say that Standard & Poor’s, which took away the United States’ AAA rating last summer and yesterday downgraded the government debt of France, Austria, Italy and Spain, is not the only credit rating firm in the Universe. It is actually not the biggest or most influential one. Moody’s is. So what? you might say, is there anyone—and by “anyone” I mean “anyone sane”—who still trusts Moody’s and any other rating agency? Well, who knows? You can expect everything and more. What is certain is that, back in 2008, S&P gave Lehman Brothers an AAA rating a month before it collapsed, but you know, no one is perfect… Apropos of positive attitudes of mind, take this authoritative and on-the-spur-of-the-moment comment:
However much the French government tries to brush it off, this was the biggy. The downgrade of France may well mark the beginning of the end for the eurozone. At the very least, the downgrade will result in more confusion, more delays and more problems for the bail-out of embattled eurozone economies.
The EFSF, the fund supporting the eurozone, is now itself in need of support. The EFSF's ability to support the eurozone has been brought into question, which brings the survival of the eurozone into question. Slowly but surely the weight of the entire eurozone is beginning to push down on Germany, which, over time, could result in the downgrade of Germany itself. [Ranvir Singh, chief executive at market analysts RANsquawk]
Wow, fortunately there are also people who think otherwise: “It’s going to create bad headlines for a day or two … But there’s no underlying new information ... This will be quickly forgotten.” (Jacob Funk Kirkegaard, research fellow at the Peterson Institute for International Economics)
So, perhaps there is no reason to take Friday’s Standard & Poor’s downgrade of nine European nations seriously, because, as someone much cleverer than me once said, “These are the last people whose judgment we should trust.”