Crutsinger reports that “A source familiar with the discussions said that the Obama administration believes S&P’s analysis contained “deep and fundamental flaws.””
Crutsingers report can be read here. http://www.chron.com/disp/story.mpl/ap/top/all/7685541.html#ixzz1UCpFQXrJ
Brian R. Hook reported earlier today that Moody and Fitch were to continue with the AAA classification, but suggests that this may only have been because of Whitehouse Arm twisting. Reuters notes that “Fitch Ratings said it is still reviewing the rating and will issue its opinion by the end of the month.” There are comments on different blogs here and there saying Sand P don’t matter and the markets really set the rates. However, certainly commentators in the UK media has been saying for more than a week that the US AAA credit rating had already in practice gone, and as the comments indicated above suggest, it is S and P who are following the Market and Moody that is out of step. Assuming the Reuters reporting is accurate, the longer term response of Fitch remains to be seen.
It seems that Standard & Poor’s resilience was somewhat more robust, and have chosen to recognise that the uncertainty about a deal, and the economic fragility of the deal reached on Tuesday, undermines the credibility of the US as a 100% stable government loan repayment environment. The downgrade essentially means that whatever cuts, austerity, and loans agreed on by Democrats and Republicans the newly agreed loan ceiling is already short to the tune of $100 billion in additional interest, according to SIFMA, a U.S. securities industry trade group
The Las Vegas Sun is certainly putting the blame at the door of Republicans.
As a Straw Poll search terms leading to this blog, seem to imply a trend associating blame with the Tea Party, (30% of terms at time of writing) other terms (65%) are simply factual, e.g. ‘USA loses AAA rating’, and one search term adding: what next? 3 terms ask ‘Who is to blame? No terms associating blame with Obama, as of 4.00am BST.
A US Treasury spokesman has said that S&P debt judgment is flawed by a $2 trillion error.