Dow down over 300 points but that's not so bad when you consider S&P continues with what amounts to Guerrilla warfare by timing the Fanny Mae and Freddie Mac downgrades on this awful day. Perhaps the timing is in response to Treasury Secretary Geitner's attacks on them. Secretary Geitner may have been responding to previous attacks on him from financial big boys.
Considering the questionable legality of S&P's (and other rating agencies) selling of AAA ratings that led up to the first half of depression, wouldn't it be likely that someone at sometime might have legally threatened them? And wouldn't such a threat also be of concern to the investment banks who pushed S&P into AAA ratings with offers of financial bribes?
All in all, assuming this leads to the rest of a very bad depression, S&P will have been intrinsically involved at every turn.
S&P originally made a $2 trillion dollar mistake (concerning a $4 trillion dollar number) which was briefly reported on CNBC that day (I happened to hear it). S&P had backed off at that time to make corrections but had reassured the financial reporter that a downgrade would be coming. I searched for news of this mistake (that looks a bit like bias an a bit like total incompetence) and found no major reporting of the story but did find this edition of "Treasury Notes." :) It is actually interesting reading and probably the single most exciting issue of Treasury Notes ever. :)
Considering how fast the U.S. Treasury found the mistake they must have been very prepared. S&P sites "brinkmanship" as a major reason for the downgrade. Thus "Tea Party Downgrade."
Although, the permanently filibustered Senate also points to systematic weakness in governing.
However, for the player responsible for the weakness in the economic system, we need look barely further than Standard and Poor's itself.