First they downgraded America. Now it is the turn of the eurozone. Standard & Poor’s is well aware of the weight financial markets attach to its pronouncements, and of late has developed the alarming habit of timing them to maximise their impact.
Nicolas Sarkozy and Angela Merkel have issued a statement, noting curtly that they ‘take note’ of the ratings agency’s decision to put France, Germany and 13 other countries on credit watch, implying a 50% chance of a downgrade in the next six month. Continue reading
Amidst all of the market babble and financial gobbledegook that poured from both ‘analysts’ and ‘practitioners’ following last week’s global market meltdown, came a shaft of light. It took the form of a question and the question was posed by Robert Reich; “Pardon me”, he said “but who gave Standard & Poor’s the authority to tell America how much debt it has to shed and how?” If I was President Obama, I would be asked who regulates Standard and Poor’s, what powers it has under statute and if the organisation has acted unconstitutionally.