Moody's makes itself a laughingstock

The Moody's bond rating agency threatens to downgrade its rating of Federal debt. At which point general hilarity ensues.

Look: There is no -- zero, zilch, nada -- chance that the United States federal government is *ever* going to default on its debt. Y'see, there's this little thing called the PRINTING PRESS, and the U.S. Government has one of'em. A very effective electronic one, that is, which doesn't even need any paper to make it work, all that happens is that the U.S. government "sells" Treasury bonds to the Federal Reserve, which then "deposits" money by adding zeros and ones to the Treasury's accounts on file at the Federal Reserve. Now, granted, it wouldn't be a good thing for the U.S. government to do a lot of this money-printing stuff, but if it were a choice of default or print, you betcha that they'd print.

So if there ain't no chance in hell of the U.S. government ever defaulting on the federal debt, WTF is Moody's up to? Well, it's a pre-emptive strike. See, the folks at Moody's are a bit... oh what the fuck. They're crooks. They fraudulently rated a buncha liar loans and shit as investment-grade securities, and cost pension funds and 401(k)s hundreds of billions of dollars. In a just world, everybody at Moody's above the ranking of mail room girl would be in jail for FRAUD. What the Moody's folks are saying, as they watch the Federal watchdogs sniffing around trying to decide which fraud trail to follow first, is "oh yeah? You think you're going to take us down? We'll take you down if you try!"

Except that all Moody's has accomplished is to make itself a laughingstock. Everybody knows that the Federal Government can't default as long as its debt is dollar-denominated and it has a printing press in its possession. So if Moody's ever did try to downgrade the federal debt, everybody would just ROFL and ignore them, it would not change investor behavior regarding Treasuries by one one micrometer -- and Moody's would lose pretty much every single one of its clients, because if Moody's is giving out clearly fraudulent bond ratings (as would be true if they said Treasuries were anything other than AAA), well, nobody would ever listen to them again on anything. Yeah, they give their clients whatever ratings the clients want them to give, if the clients pay them enough... but everybody ignores those ratings, then why would clients bother paying them for the ratings?

So anyhow, that's the real deal: there ain't no chance in hell that the U.S. is going to ever default on the Federal debt, Moody's has jumped the shark in an attempt to evade being prosecuted for fraud for all that liar loan "investment grade" shit they rated, and now they're a laughingstock. 'Nuff said on that pile of reeking horseshit.

-- Badtux the Finance Penguin