HMM. CREDIT-RATING AGENCIES THREATEN TO DOWNGRADE FEDS, and shortly thereafter Feds threaten to investigage credit rating agencies. Well, that boosts my confidence in U.S. solvency!

Related: IMF cuts U.S. growth forecast, warns of crisis. Investigate them immediately!

UPDATE: Reader Tim Peters emails:

While the ‘timing’ of the ‘fed threat’ to investigate Moody’s and other credit rating agencies may seem curious, it’s long overdue.

Civil fraud charges would be the least they should be charged with.

The truth is, they were ‘key enablers’ as the article suggested.

Well, that’s quite likely. On the other hand, the federal government was an even more key enabler, through the corruption at Fannie and Freddie, which makes a prosecution awkward. And I do question the timing.

ANOTHER UPDATE: Reader Scott Prophit writes:

if (rather when) the federal government defaults on its obligations, will the ratings agencies be sued by the Feds for civil fraud, because of its failure to adequately evaluate the risk associated with investing in government backed bonds and t-bills.

If you ask me, their role in enabling the federal government to borrow $14 trillion at effectively risk-free interest rates, it tantamount to fraud in and of itself. But they’ll never be taken to court for that now will they?

Well, it depends on whether there are People’s Tribunals then. . . .