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This is a blog on why we believe and do what we do, why we pretend otherwise, how we might do better, and what our descendants might do, if they don't all die.
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This is our monthly place to discuss relevant topics not covered in recent posts.
Open Thread
S&P is in the news today.
Ideally, S&P would establish guidelines and judge companies and countries along those guidelines. They would say, for example, 30% debt to GDP is the max for triple AAA countries, downgrade countries higher than that benchmark, and upgrade countries below that threshold. The market and politicians would have a clearer idea of what behaviors will be penalized. There would be no shocks or surprises.
This is generally how S&P judges small countries and insignificant market transactions.
There is no 30% hypothetical, but they bent the rules for the US. S&P is not very popular today, but they've never been more powerful. Congress can't repeal S&P's special status since it would seem like punishment for S&P's action. S&P is also dictating terms to the White House, Treasury and Congress. Politicians are using this downgrade to further political ends vs the other party. S&P is the clear market leader, with Moody's, Fitch, and Egan-Jone in the rear. It at least seems like getting S&P's approval means more than approval from other rating firms.
Strict policing benefits insiders you said. Well, loose policing apparently benefits the police.
The women in my freshman year college dorm decided to have a "no-mirror" week to celebrate natural beauty and boycott societal norms. The initiator and main advocate was easily the most attractive woman in the 200-student dorm.
What's going on here? Is it simply that she had the least to lose? I suspect there is more here. Any insights would be appreciated.