There are versions of this story all over the news.
Relax. It's all bullshit.
Who are the rating agencies? Why, it's the same gang of quacks who were plastering triple A stickers all over Lehman Brothers before they went down the shitter.
Not only Lehman, but AIC and Citi and everybody else who was at the Fed trough for a bailout a few months later.
When the big banks fail, the small banks will thrive. Lending will once again be based on whether or not the local bank manager thinks you can repay a loan.
Bank profits will accrue from your local bank manager's ability to make that kind of call, instead of making calls on derivatives ten times removed from reality.
The fact that these ratings agencies are still ceded any credibility whatsoever speaks volumes about how gullible we are.
Relax. When the "too big to fail" go down the toilet, the shoe-maker will still be making shoes for the grocer's children, the farmer will be trading beets for shoes, the baker will trade the shoes he got from the shoemaker to the iron-monger and the mechanic.... and so on. Life will go on.
Things might be a bit tough for the Wall Street paper shufflers and the folks at the rating agencies though.
But who needs their stuff?
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