August 8, 2011

TIGERHAWK: Is It Smart For The Administration To Attack S&P? “Now, when the Secretary of the Treasury starts popping his veins with rage over S&P’s decision, he looks just like an intemperate CEO who loses his mind because some analyst downgrades his stock. No difference, and with the same result: The angry response only enhances the credibility of the analyst (or rating agency) that issues the downgrade. Tim Geithner’s defensive rant runs the great risk of persuading investors that they should pay attention to S&P. . . . Of course, there are at least two less creditable reasons for the administration’s assault on S&P. First, it needs a political scapegoat, and the credit rating agencies are easy targets because of their shoddy practices in the mortgage market. Second, it must be hoping to intimidate Moody’s and Fitch in to maintaining the top rating. The problem with the intimidation approach, though, is that it must succeed or it will fail massively. If S&P emerges from the fight stronger rather than weaker (as I suspect it will), Moody’s and Fitch will notice that defying the Geithner Obama administration is not very dangerous.”

UPDATE: Fannie Mae and Freddie Mac downgraded too.

Plus, President Downgrade to speak at 1 pm.

Comments are closed.
InstaPundit is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.