Epic Fail

Zero Credibility

Part of me believes the gross dysfunction of our Tea Party congress does actually warrant closer scrutiny by our banking overlords, but with that said, things like this make it increasingly difficult to take Standards & Poor's seriously.

Influential investors are scratching their heads over a little-noticed development: After downgrading the country's credit rating, Standard & Poors is continuing to award AAA status to the same class of assets that nearly blew up the world economy three years ago.

From Bloomberg: "S&P is poised to provide AAA grades to 59 percent of Springleaf Mortgage Loan Trust 2011-1, a set of bonds tied to $497 million lent to homeowners with below-average credit scores and almost no equity in their properties."

In other words: U.S. Treasuries -- widely believed to be the safest investment in the world -- don't make the cut, but subprime mortgage investments do? What gives?

Sub-prime mortgage-backed securities are the single biggest, but not the only, reason we are currently in economic dire straits, and S&P is rating them higher than U.S. government bonds.

I think they need to do a little house-cleaning in the offices of S&P, as labeling the company as grossly-mismanaged would seem to be an understatement.