The arrogance of Obama and his cronies is showing once again. The S&P was the first major credit agenecy to even think of downgrading the credit rating of the US from Triple A to Double A. This didn’t sit too well with Obama, and has his nose out of joint ever since.
Well now it looks like the S&P will have to soon pay a heavy price for that decision, as the Obama Administration seeks revenge with legal action. On Monday, the New York Times stated:
“The Justice Department plans to file civil fraud charges against the nation’s largest credit-ratings agency, Standard & Poor’s, accusing the firm of inflating the ratings of mortgage investments and setting them up for a crash when the financial crisis struck.”
It appears that Obama and his Democrats still won’t take responsibility for the fact that they don’t know how to fix our debt problem. It’s much easier to continue blaming others for their lack of experience.
This lawsuit is expected to be filed within a matter of days, and as usual, blames the agency for bestowing high credit ratings to bundled mortgage securities, making them appear safer than they actually were for investors. The securities known as collateralized debt obligations (CDOs) suffered a meltdown in the wake of the housing debacle that began in 2007.
But the other two credit ratings agencies, Fitch nor Moodys is named in the suit. Fitch or Moody’s also have never downgraded the U.S. credit rating.
Anyone who goes against Obama is on his hit list.
Before all the housing crisis happened, financial experts had argued that the collateralized debt instruments were actually safer for investors, because they divided a single mortgage among multiple debt instruments, seemingly lowering the risk to investors who purchased any one instrument.
But here’s where the fault really lies and why. Bank regulators at the federal and state level had approved the use of such derivative instruments as safe for investors.
And rather accept responsibility for the failure, Obama would rather make S&P take the fall. And the Times claims an there is an additional SEC action the credit agency will soon follow. The S&P downgrade of the U.S. credit rating in August 2011 came during the Congressional ruckus over the extension of the debt ceiling. So when the downgrade happened, it ticked Obama off.
Immediately, Obama lashed out at S&P.
Britain’s Guardian reported at the time: “The U.S. Treasury and the White House launched an unprecedented attack on the ‘credibility and integrity’ of Standard & Poor’s for its decision to downgrade the U.S.’s credit rating, blasting the agency’s ‘misleading’ calculations and its ‘breathtaking’ refusal to change its mind.”
The S&P said it took the action because of weaking confidence with Washington to resolve U.S. fiscal woes.
The S&P stated in August 2011: “More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned . . .”
See Obama, the S&P realizes your policies are failures, why can’t you? Stop blaming others for your bad decision making.