<html> <head><style type ="text/css">body { font-family: "Bloomberg Prop Unicode I", Verdana, sans-serif; font-size:125%; letter-spacing: -0.3pt; color: #FF9F0F; background-color: #000000; text-align: left; } p {line-height: 1.25em; max-width:900px; width:expression(document.body.clientWidth > 900? "900px": "auto" );} h1, h2, h3 { text-align: left; font-weight: normal; color: #FFFFFF; } h1 { font-size: 130%; } h2 { font-size: 115%; } h3 { font-size: 100%; } #bb-style { font-size: 90%; max-width:900px; width:expression(document.body.clientWidth > 900? "900px": "auto" ); } b, strong { font-weight: bold; } i, em { color: #FEC54A; } pre { font-family: "Andale Mono", "Monaco", "Lucida Console"; letter-spacing: -0.3pt; line-height: 1.25em; } table { border: 0; font-size: 90%; width: 100%; margin-left: auto; margin-right: auto; } td, tr { text-align: left; } td.numeric { text-align: right; } a:link { color:#53B2F5; text-decoration: none; } a:visited {color:#53B2F5} a:active {color:#53B2F5} a:hover {color:#53B2F5} </style> </head> <body> <p>By George Anders</p><p>The full lineup of Standard &amp; Poor's Corp.'s credit ratings gets more befuddling all the time.</p>&#xD; <p>Even though S&amp;P this month cut the U.S. government's credit rating to double-A-plus, from an earlier triple-A, the ratings company is far less parsimonious in handing out its highest ratings to other borrowers. As Bloomberg's Zeke Faux and Jody Shenn <a href="http://www.bloomberg.com/news/2011-08-31/subprime-mortgage-bonds-getting-aaa-rating-s-p-denies-to-u-s-treasuries.html">report</a>&#xA0;today, S&amp;P currently assigns a triple-A rating to more than 14,000 securitized bonds in the U.S.</p>&#xD; <p>Those triple-A credits include bonds backed by car-dealer loans and farm-equipment leases: two types of borrowings known for higher default rates in economic slumps. S&amp;P also keeps awarding triple-A ratings to some securities backed by subprime home loans, a type of investment that fared disastrously after housing prices began slumping in 2007-08.</p>&#xD; <p>At least investors aren't regarding a top-tier credit rating as an automatic assurance of anything. Market participants currently are demanding about a 4 percent yield on some mortgage bonds due to get triple-A ratings. The U.S. government can borrow at comparable maturities for one-twentieth of the cost, its lower rating notwithstanding.</p>&#xD; <p>When market pricing is so profoundly at odds with the ratings hierarchy, it's usually a sign that the credit analysts missed something.</p> </body> </html>