Love those triple A ratings.
Hate the ratings agencies.
That’s not a totally unfair characterization of the attitude held by many toward Fitch, Moody’s and Standard and Poor’s.
Win a high rating, as the Metropolitan Council did today, from any of them and you get a better deal on borrowing money.
The Met Council is trumpeting its highest, and nearly highest, rankings from Moody’s and S and P.
S and P, for example, likes the Twin Cities’ economic “stability” and the Met Council’s strong financial position.
The reason for the love/hate relationship some have is that these ratings agencies are some of the same folks who rated what we now know were exceedingly toxic home mortgage products as perfectly safe and secure for investors.
That was before the Great Recession and the mortgage meltdown.
Let bygones be bygones, all is forgiven. After all, someone has to take on the messy job of poking around in national, state and local financial laundry to uncover stains that can mean risk.
Take the budget impasse that led to the Minnesota government shutdown this summer. Fitch was not amused and downgraded the state’s bond rating.
Take the federal government debt limit brouhaha and continuing budget stalemate. It didn’t put smiles on the faces of the ratings bosses at S and P who downgraded U. S. debt.
Taxpayers will be paying the higher cost of borrowing money.
To end this doleful blog entry on bond ratings and borrowing, it’s always fun to quote the “candy is dandy, liquor is quicker” thinker, Ogden Nash, who is reputed to have said, “Some debts are fun when you are acquiring them, but none are fun when you set about retiring them.”
Although my favorite debt quote, if just a tad off the main point, is, “Another way to solve the traffic problems of this country is to pass a law that only paid-for cars be allowed to use the highways.”