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.