My ASS+

Three times in the span of thirty seconds the cable news reporter (Saturday morning) said "the U.S. is now riskier than France"... Say what? Standard and Poors replaces three A's with two A's and a plus sign and the U.S. is now riskier than friggin France? The same Standard and Poors (along with Moody's and Fitch) that kept three A's next to the letters AIG and two next to the name Lehman Bros literally minutes before each collapsed? My ASS+!!

For starters, the printing press, alas, works every bit as good today as it did last Thursday... And the chances that the U.S. will default, literally, as opposed to inflationally (printing to pay its bills) on a penny of its debt over the next couple of decades, even while operating status quo, is somewhere in the neighborhood of... uhhh... like zero percent... I'd take the U.S.'s treasury debt over France's, when we're talking safety, any day of the week...

Now you're going to love this: In late '08 the big three agencies, S&P, Moody's and Fitch, were hauled into Congress for a tongue-lashing after entirely failing the investor leading into the credit crisis. Here's one of their henchmen's riposte:

"An important part of our analysis was based on a review of governmental support that had been applied to Bear Stearns earlier in the year. "Frankly, an important part of our analysis was that a line had been drawn under the number five firm in the market [Bear], and that likely number four would be supported as well." "Our opinion applies to whether we believe an instrument will pay or will not pay."

Well now, apparently a major premise upon which they based their ratings no longer applies... Cause if a U.S. government backstop were the primary excuse for awarding a top notch-rating, and if their opinion indeed applies to whether an instrument will or will not pay, the one institution on the planet that passes both those tests with flying (red, white and blue) colors is the U.S. government...

Now if they rate a country based on debt-to-GDP, or whether it has the revenue to cover its current spending, well then that's a whole different proposition altogether... In that case, our AA+ would be a gift...

Personally, I have no problem with the downgrade, in fact (my patriotism notwithstanding) I applaud it - in that it's yet another signal to politicians that business as usual just isn't going to cut it in the months and years to come...

As for the media, if catastrophe was their spin for the debt ceiling debate, AA+ stands for American Armageddon plus some...

Bottom line; don't get all spun out over recent events... In fact, take heart, for a change of course (albeit this is a big ship we're turning) is at hand...

Stay tuned...