Here we go again. Two weeks after Fitch ratings cut Berkshire Hathaway's
Just like Fitch, S&P cited market volatility that "has reduced the statutory capital of the insurance operations." In other words, losses in big positions like Wells Fargo
This is nothing new. Even though his investment in Goldman Sachs
What boggles me is why investors take the rating agencies seriously anymore. The rating agencies, you'll remember, conveniently slapped premium "AAA" ratings on anything you asked them to during the housing boom, only to later become shocked -- shocked! -- that lending people money who couldn't pay it back was inconsistent with premium credit quality.
So why do we still listen to these agencies? I mean, really, this is like Henry Blodget giving tech-stock advice. Or like getting real estate tips from David Lereah. Or taking ethics lessons from Rod Blagojevich. When people royally screw up, they should become irrelevant. Standard & Poor's -- the company that just put Berkshire on notice -- is the same organization that famously claimed in an internal email that a structured-finance deal "could be structured by cows and we would rate it." Wonderful.
Thankfully, the Berkshire downgrades are pretty immaterial -- this isn't like AIG
For related Foolishness:
Fool contributor Morgan Housel owns shares of Berkshire Hathaway. American Express and Berkshire Hathaway are Motley Fool Inside Value picks. Berkshire Hathaway is also a Stock Advisor pick. The Fool owns shares of American Express and Berkshire Hathaway. As Hathaways go, The Motley Fool 's disclosure policy is equally fond of Berkshire and Anne.