This is the most intriguing story of the day, about Moody’s Investors Service warning that US debt could lose its AAA rating if it doesn’t keep its spending in check. Today’s Times Business. Of course it’s the same Moody’s that stamped AAA on all the derivatives from the repacked home mortgages that led to the biggest economic collapse since the Great Depression. Further, the quote is fun to try and parse: “Moody’s said the United States and other major Western nations, particularly Britain, have moved ’substantially’ closer to losing their gilt-edged ratings. The ratings are ’stable,’ but “their ‘distance-to-downgrade’ has in all cases substantially diminished.”
Try that at a DWI checkpoint. ”Officer, I’m still sober although my distance to downgrade has been substantially diminished.”
It sounds like the same nonsensical reasoning that led to some of their past ratings. Maybe it is a threat to keep the Obama Administration from doing meaningful financial reform. Maybe it’s someone trying to sound like the Alan Greenspan of old — remember when he used to utter things that were once deemed as important as the cracks on a turtle shell? But still, the ironclad guarantee of payback in non inflated currency on a loan to the US does seem somehow like it has changed “substantially.”
