You remember Standard and Poor's, don't you? They were the rating agency that happily applied their AAA stamp of approval to the noxious stew of sub-par mortgage-based paper being churned out by the big investment banks right up until the whole scheme fell off a cliff in 2008.
Well, they're up to their old tricks, assigning ratings that have absolutely nothing to do with the security of the underlying assets. In this case though they're threatening downgrades instead of giving the triple A stamp to hundreds of billions worth of "liar loans". What are they downgrading? Sovereign debt. The stuff that's guaranteed by a nation state, as opposed to the triple A stuff a few years ago that was guaranteed by Joe Lunchpail when he refinanced his hundred thousand dollar bungalow in Cleveland for three hundred thousand.
S&P makes this threat while hundreds of EU technocrats gather in Paris to proclaim yet again that the sky continues to fall. It's been falling for quite some time now. Led by Merkel and Sarkozy, the assembled will somberly announce that Western Civilization faces a grave threat unless the public servants and the factory workers of the EU get serious about tightening their belts.
Those hundreds of EU technocrats will meanwhile be loosening theirs as they settle down for lunch in the finest Parisian restaurants. You won't find one of these Eurocrats earning less than the mid-six figures in salary. You won't find one without an expense account footed by the taxpayers. You won't find them spending less for lunch than the average working class family spends on groceries in a week.
And they'll proclaim that it's all for the greater good. The same gang of crooks who were profiting from the fraudulent AAA ratings a few years ago will be profiting from today's threat of a downgrade.
It's not that they're lying.
That's just how they define the greater good.
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