The Big U.S. Downgrade: Folly or Foresight

Three years ago, Kevin Rudd, the then prime minister of Australia declared to Bloomberg News, “The ratings agencies will pay.” So far, it's been the opposite.

Rudd thought the raters would be called to account for the largest blunder in financial history when American raters S&P, Moody's and Fitch stamped AAA on half a trillion dollars of subprime debt only to downgrade it to junk as it collapsed.