Why I adore Bill Mitchell’s Billy Blog

Ratings firm plays the sucker card … again

Companies that sell shonky products under false pretenses are typically prosecuted by the authorities. Those that sell shonky products generally are typically run out of business. But there is one class of such products that seem to escape the scrutiny of both the authorities and the market. Indeed, they seem to have bluffed many governments into believing that shonky is good. Last week, the patently irrelevant Moody’s rating agency downgraded Britain’s sovereign debt ratings from Aaa to Aa1. The fact it was headline news how stupid we all are. The fact that George Osborne then had to lie about what it meant showed how stupid he is. The fact that the Opposition leader described it as a humiliating blow showed how stupid (and opportunistic) he is. How a company that was complicit in the financial crisis can command so much free advertising is beyond me. I must be stupid! The fact is that the latest ratings are without meaning or import.

The ABC (our national broadcaster) has a program Business Today and it featured the ratings downgrade. The first segment was a cross to a so-called expert in Sydney holding a tablet to look important with her private bank’s logo occupying about half the screen in the background. The ABC has a strict non-advertising policy. Since when does one of the big four banks get free advertising on our national broadcaster

It wasn’t as if the analysis was worth listening to. We got gems like the Moody’s decision was “Well priced in” and that she was “Not expecting a market reaction today on the market”, which I thought was about the most intelligent statement among the 2 minutes of platitudes. Really, play school is better than that trash that goes as informed reporting.


The segment that followed featured George Osborne saying that the downgrading confirmed everything he has been saying – too much debt. He lied.

The rest of his post can be found here