You Come at the King, You Best Not Miss

by CC August 9, 2011 8:45 pm • Commentary

This really isn’t an important story, I just find it funny. (Bold emphasis mine)

The SEC is weighing sweeping new rules designed to improve the quality of ratings after their poor performance in the financial crisis.

The 517-page proposal includes a requirement that ratings agencies post on their websites when a “significant error” is identified in their methodology for a credit rating action.

The letter was sent three days after the U.S. Treasury Department accused S&P of miscalculating — by some $2 trillion — the U.S. debt in the next 10 years. That calculation was in a draft press release announcing a downgrade in the government’s credit rating from AAA to AA-plus.

S&P vehemently denied it had made an error, but acknowledged that it changed its long-term economic assumptions after discussions with the Treasury Department. It switched to another economic scenario that resulted in a debt load $2 trillion smaller by 2021. But it said that did not affect its decision to downgrade the U.S. debt.

If I were the accountants at S&P I’d also be on the lookout for an audit from the IRS any day now. Anyhoo, the story gave me an excuse to post a scene from The Wire, so… (very NSFW):