S&P = Serving Politics

   The business of credit ratings agencies took another blow after the suicidal decision of S&P to enter officially in politics by involving in the global battle between USA and Russia. By lowering the credit rating of Russia to just one level above junk, S&P showed it is not a professional agency using reliable methods of evaluation, but is politically dependent PR agency. An agency, needed to help American government in a moment it is losing an impressive duel on global stage and falling in disgrace.

   Even up to now the credit rating of Russia was kept artificially low. The establishment agencies has kept it around BBB – lower at moments even than Italy. It was funny as with its debt of less than 10% of GDP, almost balanced budgets and enormous reserves in foreign currency Russia is one of the most stable and reliable economies in the world. Under the universal formula, used by this site, Russia has to be an AA-rated country.
   It is logical to lower someone’s rating when political tensions arise. But this means that must be lowered the ratings of all involved parties and all threatened parties. I.e. it must be lowered the rating of USA, and also the ratings of the most fierce EU allies of USA. It must be lowered also the ratings of entire Eastern Europe, that is the most vulnerable part of world in this crisis. In fact, if serious sanctions are imposed on Russia the entire Eastern Europe will go default. Even the ratings of Germany, France and UK are at risk in a case of escalating the Ukraine conflict. Germany has big export and many investments in Russia. France has military relations and big ship building contracts. And the other name of London is “Moscow on Thames”, as big share of the City is owned by Russian investors and counts on Russian money.
   But we see nothing of this. Instead – S&P is joining the inept effort of White House to press Putin, using any means and not thinking very much. Obviously it is time to rename S&P. From S&P Financial services to S&P Political PR Services.

Dobri B.
April-25th-2014

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