S&P Downgrades Fannie And Freddie, Others

The hit parade keeps coming. Liberal Talking Point by end of day: it’s the TEA Parties fault

Standard & Poor’s ratings service today announced it was downgrading the credit of Fannie Mae, Freddie Mac and 10 of 12 Federal Home Loan Banks that were propped up by the federal government after the financial crisis of 2008. S&P reduced their ratings one notch, to AA+ from AAA, its very highest rating.

The announcement was no surprise in light of S&P’s downgrade of the government’s debt on Friday evening, but the U.S. stock market — already spooked by Friday’s news — reacted negatively anyhow. The Dow Jones Industrial Average dropped nearly 375 points after the announcement before recovering somewhat. And the price of gold, considered a safe haven in uncertain times, topped $1,700 per ounce for the first time ever.

“The downgrades of Fannie Mae and Freddie Mac reflect their direct reliance on the U.S. government,” said Standard & Poor’s in a statement shortly after the markets opened today.

Wait, it’s the fault of The Government, including the bailouts? Who woulda thunk it? But, wait, it gets better!

“The states and locality ratings will be next because of the interest rates benchmarked against U.S. treasuries so there is a linkage between that debt,” he said. “In an environment of budget austerity this is not good for states and localities. This will trigger another closer look at state and local finances. Some states that were in trouble already and some in the bubble.”

Obama is scheduled to speak at 1pm Eastern time, so, turn on your TV or radio around, say, 115 when he deigns to show up, the better to hear him blame those evil rich with their corporate jets who just are being forced to pay their fair share, same old boilerplate, “I won’t let this happen”, “jobs are all I think about (between fund raisers)”, raise taxes (on job creators)….you know the script. Heck, you could build it yourself.

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