Osborne/Credit Downgrade

Sadly I would guess he'll just take this as a sign that he needs to cut harder and cut faster, and as usual a large section of the press that cares more about the ideology of austerity than the economics of it will lap it up.

I just don't understand how it isn't blatantly obvious to the whole world that the credits-rating industry, at least as far as whole countries go, is pretty much a massive racket - not after Greece was given a triple-A rating even as the country was rapidly, and not even very secretly, going bankrupt. Or, in the most generous case, if not a racket then at least nothing like the precise science it's made out to be.

Perhaps it's one of those cases where everyone knows in their heart of hearts that it's a load of bollocks, but carries on treating it as gospel truth because that's easier than tackling the shared delusion.

At ECGD there's a whole division devoted to analysing credit ratings and trying to predict how they'll change a few months or a year down the line. The Greece debacle makes me think they might as well be consulting Mystic Meg's horoscope page. And the companies that publish these ratings make an absolute fortune...

IdleRich said:

Grand Master - cut faster!


Yeah, I just don't see how their power could be broken.

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Do the ratings agencies still have the same power? My impression (which comes more from an interest/understanding of politics than economics, was that the US downgrade had less impact than expected. Also, a different impact than expected.

IdleRich said:

But the thing here is that Osborne all but staked his reputation on those bragging rights.

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Oh sure, I know - believe me, I'm not standing up for Gidiot

All the bigwigs have been saying the slowdown will intensify in the larger countries this year so he might get of the hook as things get more pronounced in Germany and the rest.

Point to a trend

Are the credit ratings agencies who audit countries the same ones who keep tabs on our own personal credit ratings? Either way, they're fucking cunts. The idea that someone can have a bad credit rating because they've never borrowed money is totally ludicrous, and they know it. They're in cahoots with the money lenders, and they use this as a means to make everybody borrow money -- even when they don't need to -- just so they can attain a credit rating so they can rent a house.

If you want to borrow money, I think you should have to ask your Dad. Let him decide how trustworthy you are, and put him in charge of your credit score. All loans from the banks get filed through your Dad, and if you default, he gives you a clout. Better than all this Moody's nonsense, I'm sure you all agree.

Even from an amoral perspective, it's the pretense at objectivity that's staggering. How can you possibly quantify the creditworthiness of an entire country in any kind of impartial way?

The scam where they gave Iceland (in 2006 or whenever) an over-inflated high credit rating based upon absurdly fictional country reports that Harvard academics had been paid to write by huge financial institutions, was pretty staggering. Presume it happens all the time...

Now it turns out that the conclusions in an economics paper, which formed the entire basis of Gideon's obsession with reducing national debt and subsequent austerity measures, were actually wrong due to an error in a spreadsheet.

That awkward moment when your economic policy fails because cell c4 should have been a 5 rather than a 7...

OTOH, I bet it was beautifully laid out, colour-coded and everything.