S&P's initial downgrade announcement was riddled with basic math errors #p2 #tcot

from http://www.dailykos.com/story/2011/08/08/1004443/-Ss-initial-downgrade-announcement-was-riddled-with-basic-math-errors?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+dailykos%2Findex+%28Daily+Kos%29

With stories like this, it's becoming evident that the S&P downgrade says more about the S&P than it does about America:

Ahead of its downgrade of the U.S.'s AAA rating Friday night, Standard & Poor's sent a draft press release - obtained by POLITICO - to the Treasury Department that afternoon that included several numerical errors, setting off a heated back-and-forth as officials tried to correct the credit firm's work.

The draft press release, according to POLITICO's Morning Money, included projections that overestimated U.S. debt by $2 trillion. The initial projections were the general government debt-to-gross domestic product ratio would rise to 81 percent in 2015 and 93 percent by 2021.

In the final release, those numbers were revised down to 79 percent and 85 percent, respectively. Treasury officials noted that the corrected numbers put U.S. debt in line with other AAA-rated nations, including the United Kingdom and France, arguing that the U.S. ratio won't reach France's level for a decade.

As a result of its basic math errors, S&P rewrote its initial release, correcting its numbers and even changing the arguments it made. In other words, the S&P was looking for facts to support its conclusion, not the other way around.

Given that they weren't ever going to change their minds anyway, I almost wish they'd published their original draft release. Their decision would be that much more mockable. Then again, if you're looking to mock the S&P's ratings, all you have to do is point to the AAA ratings they gave to the worthless mortgage securities that caused the 2008 financial collapse. As of late 2007, they'd only downgraded about 1% of those instruments. We all know what happened next.