AAA?

One of the more worrying bits of news, that has gone relatively unreported as we concern ourselves with duck islands and flipping has been Standard & Poor’s decision to put Britain’s credit rating on a negative outlook.  While they haven’t yet downgraded the UK’s AAA rating (and if and when they do, it will be a big big problem) it’s nonetheless a serious piece of news.

But isn’t there an argument that we should no longer treat pronouncements from S&P Moody’s and Fitch as gospel?  After all, among all the reasons for the credit crisis, one of the most immediate was the utter uselessness of the rating agencies at providing realistic ratings for credit derivative products.  If they were so utterly incapable of providing accurate ratings then, why should they be right now?

None of this is to provide the Government with cover for their extraordinary economic incontinence, merely to wonder quis custodiet ipsos custodes.