AAA

Obviously they have all been asleep, the Moodys, the Standard&Poors and the Fitches, when the banks wholesaled their worthless mortgages and doomed debts. The credit rating agencies just continued awarding them top status unblinkingly. With the result that the bubbles grew bigger and bigger, as did the explosions which followed.

But now we are four years from then and now it are mostly state debts which are at stake, I am slightly more inclined to listen to them and to the markets. It might be true that the rating agencies at the moment puncture as much bubbles as they create.

I think so firstly because the rating agencies themselves are shocked by the extent to which they have let themselves be carried away in the financial charade. They seem to have resolved to be more critical in their assessments and to explicitly name and shame obscure and misleading financial constructs.

And secondly because the credit rating agencies, with in their wake the markets, seem to operate in a way which is less speculative and alienated from reality. This I gather from the fact that on the rare occasions that the EU and individual governments show some willingness to really put their financial affairs in order, markets react immediately. At such a moment the interest rate on government bonds goes down and the stock markets go up. Apparently then serious calculations are being made by rating agencies and financial institutions that demonstrate that trust is justified again and that investing can pay again.

The circumstance that what governments announce is generally felt not to be enough for a lasting effect, in my opinion does not alter that conclusion: apparently there are bottoms and ceilings. To that I connect the conclusion that, despite the disproportionate financial fictions, there still is a connection to the real economy. So that there is question of a reality check which aims at serious returns on investments.

The importance of this can be clear when you consider that it could be quite different. It is not inconceivable that markets at some point do no longer respond at all to political initiatives, that there is not any inhibition left whatsoever to interest rise and to speculating the euro to death, and that you no longer need any credit rating. Except for a number of speculators, that’s what we rightly fear the most.