As financial markets collectively freak out over Standard & Poor’s recent “downgrading of Greek and Spanish debt”:http://edition.cnn.com/2010/BUSINESS/04/28/greece.euro.markets/index.html?hpt=T1, isn’t it worth remembering that these are the same guys who told us that CDOs backed by sub-prime mortgagues were safe, investment grade assets? Not that they are necessarily wrong about Greek and Spanish debt, but from a social science perspective, why are they still apparently trusted as much as they are? Why haven’t ratings agencies suffered more of a hit in terms of their influence? Is it simply that there are so few ratings agencies out there?
