Wow, how things have changed

Early this morning in London news that both Moody’s and Standard & Poor’s both warned the United States on its credit rating.  The concern is, of course, with the spendthrift ways of the Legislative as stoked by the Executive branch – and over multiple election cycles.

This story would normally be news enough and probably will be the center of attention of many financial bloggers.  But not here it won’t.  Why?

While interesting, I don’t consider this to be news.  Both Moody’s and Standard & Poor’s have access to the same publicly available information that we all do to assess this situation.  But then that is the point.  Since when, even given access to the same data that we all have access to, have Moody’s and Standard & Poor’s threatened the United States with a credit downgrade?  To my knowledge, NEVER.  Wow, how things have changed.

I consider this to be a very, very healthy sign that the credit ratings agencies have permanently shifted.  They have been chastened and transformed by the Great Recession.  That means a more honest and forthright credit ratings crew.  That means actual analysis has a higher chance of actually taking place with the walls of these storied organizations.  Amen!

Have I been saying this sort of thing for awhile?  Check out my posts from:

• 13 October, 2008 (!) entitled, “Changes”
• 10 March, 2009 entitled, “A Proposal for Change, Part I”
• 17 March, 2009 entitled, “A Proposal for Change, Part II”

In those posts I emphasized that the institutions that stood by and did nothing, or worse, contributed to the meltdown that led to The Great Recession had to change.  So a public condemnation of the ratings agencies of the world’s most powerful nation, the United States, is a radical shift.  Yea!

Jason