Being Played

"I've been played like a grand piano by Gekko the Great."
--Bud Fox (Wall Street)

A few weeks back we noted the contradictory nature of Moody's putting US debt under 'review' for a possible downgrade. The ratings agency said that the creditworthiness of the US would be in jeopardy unless the debt ceiling is raised.

Think about this...THINK! This is the equivalent to saying that your ability to pay back a loan increases as you borrow more.

We wondered at the time whether this statement was politically motivated.

Over the past couple of weeks, as drama surrounding the debt ceiling talks has increased, both Moody's and S&P have issued louder warnings that America's Aaa credit rating may be downgraded if the debt ceiling is not raised.

The obvious question upon examining our fiscal situation is how the US could possibly hold the highest credit rating in the land in the first place. Be that as it may, seeking to justify a reduction in creditworthiness because the borrower does not borrow more is simply laughable.

Indeed, the behavior of the ratings agencies seems politically motivated. The rating agencies, and the concept of credit ratings themselves, conveniently fit into a political design grounded in debt and money printing.

If you slurp the rating agency story down, then you're being played.