> How seriously should we regard S&P’s warnings about the long-term fiscal instability of U.S. public finances?
In his book Capital Rules, Rawi Abdelal concludes that ratings agencies' rankings are not the leading they are usually assumed to be. Even though people like to bitch about the agencies' powers, he says what they largely do is confirm the markets' biases and thinking; they are an indicator, not a former, market opinion.
This doesn't really change anything, no? Where are investors going to go? Europe? China? ha.