Hell Hath No Fury Like a Rating Agency Scorned

Over the weekend Standard & Poor's poked the U.S. government in the eyes, with its debt downgrading. But hey, isn't this the same S&P that got whacked upside the head by Congress (and everyone else) for its crappy ratings on billions of dollars in subprime MBS? And wasn't it S&P EVP Vickie Tillman who told our elected officials that it wasn't S&P's job to rate the underlying mortgages in MBS -- and that its focus was merely on “how much cash flow we believe the underlying loans are likely to generate”? As one Clayton official told us back then: it (Clayton) actually informed S&P of a number of 'exceptions' on loan pools as early as 2005. Still, S&P gave glowing ratings to nonprime bonds. And now S&P says the U.S. is a bum. To some, it looks like payback time…