Theater of the Absurd

Now that the debt ceiling has been raised, all this talk about still lowering the AAA rating of US Treasuries is beyond silly, and boarders on absurd.

Let's start with the rating agencies, you know those guys that rated those subprime mortgage securities AAA. Lots of credibility there! These same guys are now going to say US Treasuries are not the safest investment?

How ridiculous they would look when, after a downgrade, the interest rate on USTs remain below other AAA rated countries debt. Looking at how in demand USTs are world wide, and how low the rate of interest buyers are willing to accept, maybe investors know something the rating agencies do not. Namely (politicians aside) the US is still the strongest, safest, most stable and transparent major country in the world and as such remains the safest haven for investors.

I don't think a downgrade will happen, which is why I call this whole controversy a bit of Theater of the Absurd. The rating agencies may be trying to make a point with all the cautions, outlooks and watches, but they'd look ridicules if they actually did it and lowered USTs below AAA.

Eric