Standard & Poor Steals Headlines with “Ratings Hatchet”

They must really think there is no such thing as bad PR.

No sooner did we get past the debt ceiling limit fight in Washington – a battle that left us all exhausted, but relieved that it was finally over – than we woke up to news that the Standard & Poor had downgraded U.S. debt, which sent markets reeling and left us all shocked. Wasn't this the very thing we were trying to avoid?

The Journal wrote a nice story yesterday that documented the moments leading up to the downgrade. It has the elements of a political thriller and PR case study, including details about a press release that Standard & Poor shared in advance with the Obama administration, which included a $2 trillion miscalculation, and how both sides wasted no time in launching campaigns, taking to the airwaves to tell their sides and win credibility points.

Paul Krugman wrote in the SundayTimes about S & P's incredible chutzpah:

If there’s a single word that best describes the rating agency’s decision to downgrade America, it’s chutzpah… America’s large budget deficit is, after all, primarily the result of the economic slump that followed the 2008 financial crisis. And S.& P., along with its sister rating agencies, played a major role in causing that crisis, by giving AAA ratings to mortgage-backed assets that have since turned into toxic waste.

And the NY Post reported that S & P took a "ratings hatchet" to Warren Buffet's Berkshire Hathaway yesterday, "less than 48 hours after the Oracle of Omaha publicly blasted [it]."

These guys at S & P know how to steal a headline. Do they have any other icons to slay? Just what are they smoking over there?