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      BFF
“Standard & Poor’s is taking great pains to defend its “A” rating for Lehman Holdings Inc. The rating company fired off a report Wednesday asserting that the recent collapse of the investment banking firm was a case of negative market sentiment — whether or not grounded in fundamentals — creating significant difficulties that led the company to the point of failure. “In our view, Lehman had a strong franchise across its core investment banking, trading, and investment management business,” S&P stated. “It had adequate liquidity relative to reasonably severe and foreseeable temporary stresses.” The ratings service insisted that looking beyond the current downturn, the firm had good earnings-generating ability. “We believe the downfall of Lehman reflected escalating fears that led to a loss of confidence ………..”

Thus wrote Paul Krugman in Sept. 2008 about Standard and Poor (S & P) high rating of Lehman Bros just before it collapsed. Ergo, the S & P downgrading U.S. debt is probably as meaningless as its high grade of Lehman. Good point. I think I asked around that time: wtf rates S & P?
Goldman Sachs evaded the fate of Lehman because it had, it has, too many people in Washington in its deep pockets. That would have been a better lesson, a needed financial catharsis. Dommage……..
Cheers
mhg


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