The War On S&P Has Begun

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We’re not convinced that if S&P were to lower its credit rating on the US it would have a big impact on rates.

If anything, it would only make us more bearish on S&P itself, as angry lawmakers finally got serious about ratings agency “reform.”

Anyway, with the debt ceiling fight (almost) over, the war on S&P — just in case it still downgrades the US — has begun.

From Ben White at Morning Money:

Top Democrats are NOT taking the prospect lightly. Some are instead moving to discredit a possible S&P move before it happens. A senior Democrat sent M.M. this comment from S&P’s Scott Sprinzen, made back in September of 2008: “Overall, and despite nervous market sentiment in recent months, Lehman has maintained a very stable funding profile. We consider its excess liquidity position and contingent funding plan to be sound.”

Said the top Dem: “Hard to imagine that guys who had an A rating on LEH the day before it collapsed will have any credibility if they downgrade the US.” Zing! http://reut.rs/qNkFmo 

So… short McGraw-HIll?

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