Constellation says "we're not in a good position to face a downgrade by S&P" and S&P, on hearing this says "okay, I'll downgrade you".
Is S&P stupid? A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
Is S&P stupid?
Well judging on how relentlessly positive they've been about organisations who have heavily invested in securities that have been little better than toilet paper, if that then you'd have to say you've good evidence to say yes. Any idiot can face a crisis - it's day to day living that wears you out.
S&P got into a heap of trouble following the Enron crack-up by not looking past the companies financial (mis-) statements to the underlying reality. So to avoid that mistake they are going to quickly down rate companies on the edge and by down rating those companies they drop their debt rating below 'investment grade.' Once that happens insurance companies & etc. are forced to sell the paper, driving the interest rates of that paper up, increasing the cost of the debt, & so on through the downward spiral making the ratings downgrade a self-fulfilling prediction.
Which "proves" the ratings system "works." (For a low value of "proof" and "works.")
I, for one, sit back and marvel at the asininity of it all.
¹ My humble suggestion for updating the 'Invisible Hand' metaphor.
</tinfoil hat> Peak oil is not an energy crisis. It is a liquid fuel crisis.
