Anger Over Credit Rating Resurfaces in Washington
By LOUISE STORY, JULIE CRESWELL and GRETCHEN MORGENSON
in part:
The ratings agencies’ purview is traditionally viewed as evaluating data and revenue projections for debt issuers, but they have long taken governance into account for ratings of sovereign nations and corporations. In its announcement Friday night,
S.& P. cited the political gridlock in Washington during the debt limit debate as a main reason for its decision. “The gulf between the political parties,” S.& P. said, had reduced its confidence in the government’s ability to manage its finances.
In an interview Saturday, David Beers, the global head of sovereign ratings for the agency, said “we have to look at the process under which government policy is made.”
But some politicians questioned whether governance issues should play such a large role in the country’s debt rating.
Randy Neugebauer, a Texas Republican who heads the House Financial Services’ Subcommittee on Oversight and Investigations, said it was appropriate for S.& P. to consider the political situation in its analysis. But he said that it was speculative for the agency to use predictions of what Congress would do in the future as a rationale for a downgrade.
“One thing that puts them out in uncharted waters is trying to predict what the political environment is going to be,” Mr. Neugebauer said in an interview. “They’re not predicting an overly cooperative environment in Congress and that’s a very subjective call.”
Mr Neugebauer has no credibility with his remarks, how can he say its "subjective to predict THIS Congress is uncooperative" after the debt ceiling debacle...PLEASE get real! clo
http://www.nytimes.com/2011/08/07/business/economy/standard-poors-downgrade-evokes-anger-in-washington.html?pagewanted=1&_r=1&hp
DO SOMETHING!
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