S&P's $2 trillion math error : silly mistake or deliberate sabotage?

[hedgehog]

Poll question: S&P's $2 trillion math error : silly mistake or deliberate sabotage?

Out of nowhere, suddenly Standard and Poor's is determining U. S. fiscal policy by threatening to downgrade the credit rating if the company disapproves of the budget. One might argue this is a matter of simple fiduciary responsibility, but

"Relying on mathematical models, Moody’s and S&P awarded AAA ratings to mortgage securities packaged during the five-year housing boom, deeming them as safe as government bonds. About 90 percent of AAA securities backed by subprime mortgages from 2006 and 2007 were later downgraded to junk status, Levin’s committee said"

http://www.bloomberg.com/news/2011-04-13/moody-s-s-p-caved-to-mortgage-pressure-by-goldman-ubs-levin-report-says.html

That's right, S&P now rates the US credit rating below what they gave to sub-prime mortgages.

SO - when the White House reports that Standard and Poor's made a 2 trillion dollar math error, does that suggest simple incompetence or deliberate sabotage?

[boppers]

1. "deeming them as safe as government bonds"

And they turned out to be not safe.

That's your answer right there, S&P has realized that things formerly thought of as "safe".... aren't.

[Nay]

2. So, has S&P responded to the report of the error? Have they said they

will upgrade back to AAA, or that there is no error? Or are they ignoring the report?

[BumRushDaShow]

4. They supposedly admitted to the error

but when on to mumble a justification for going forward anyway because of the slow congressional action.

One could even compare to an baseball umpire who calls a play "safe" when the guy was obviously "out" (including verification on replay). And the ump even admits the call was probably wrong but will insist on sticking with it anyway just because... I.e., because he can. :crazy:

[Nay]

6. Honest to god, I give up on this damn country. Glad I have dual citizenship.

[gateley]

3. Wasn't there something about a $1B "bet" that S&P would

downgrade? I only caught the subject line on a couple of DU threads, but that's what I thought this poll was going to refer to. Do you have any info on that?

And, IMO, it doesn't matter if S&P is incompetent, people believe what they say.

[mckara]

5. S&P is Complicit with Neoliberal Ideologues in Destroying the Welfare State

[Creideiki]

7. In the US, "Welfare" really needs to be in quotation marks.

We don't have a welfare program any more; at least not one that covers everyone in need. At least we're taking care of some of the families, but it's a far cry from what would actually be considered a "Welfare State" in any civilized country. Maybe in Ethiopia, I guess.

[polmaven]

8. Some tool on CNN this morning

Called at a simple "rounding-up" error. ....A two trillion dollar "rounding-up" error????? What?

[hedgehog]

9. Check this thread before answering:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1680420

[Igel]

10. The WH says it's a mistake, an error.

S&P says they don't believe that the Bush/Obama tax cuts will un-happen as the current baseline says they will.

It might be wrong, it might be right; it's an assumption, and ratings based on future performance and behavior are based pretty much entirely on assumption. It may be a cynical assumption, no matter. They were explicit about it.

Where do you get a better idea about what S&P thought? Reading what S&P wrote or reading what the WH said must have S&P done?

So, when the WH reports that S&P made a $2 trillion error, does that suggest simple incompetence or deliberate sabotage? I don't know, but I suspect it just shows some WH staffer's incompetence. At least that's what I prefer to think. Less Machiavellian; I've never held up The Prince as a model of ethical behavior.