I'm a child of the South. It may not be well known in the remainder of the country, but in the South you can say the meanest, nastiest things imaginable about people just as long as you add "Bless his heart" to the end of the sentence.

Yesterday Standard & Poor's Ratings Services lowered diversified holding company Leucadia's (NYSE:LUK) credit rating down to "BB" from its previous rating of "BBB-." The reason? Well, basically S&P came out and said that they'd lowered Leucadia's rating as a result of its recent appetite for investments in "high-risk telecommunications assets."

In other words, S&P said: "Leucadia is a telecom investor, bless its heart."

That's cold.

Leucadia has been favorably (but still perhaps unfairly) crowned the next Berkshire Hathaway (NYSE:BRK.a) (NYSE:BRK.b) for its willingness to take enormous bets in companies that the market has left for dead. Is there anything that has been left for more dead than the telecommunications sector? I mean, even second comings of the dot-com such as Mamma.com (NASDAQ:MAMA) get more respect than telecom companies. The bad news has gone on for four years, and it shows no signs of stopping anytime soon.

So when Leucadia expended some 25% of its entire shareholders' equity to buy out telecom basket case WilTel, it raised more than a few eyebrows among investors and, apparently, the ratings agencies. Follow this up with Leucadia's petition to the Justice Department to allow it to purchase up to 50% of MCI (NASDAQ:MCIP) -- and its actual purchase of 5% of MCI's equity -- and the S&P has apparently determined that Leucadia's fortunes are tied not so much to its own investing acumen and more to the ebbs and flows (mostly flows) of the telecom sector.

S&P noted that the telecom purchases represent a change in investment strategy for Leucadia in that it is willing to risk such a concentrated portion of its equity on distressed businesses that may require additional restructuring, in industries fraught with risk.

Bless their hearts, they've walked right into the midst of a telecom nightmare. Didn't Leucadia get the memo? MCI and AT&T (NYSE:T), the former kings of the hill, are the next best thing to takeover bait. And really, just what is the thing that is just not quite as great as bait?

You may rest assured that Leucadia got the memo after all. This is, after all, a cash-rich company in the same way that the telecom firms are not. Besides, when everyone thinks the same thing at the same time, it should be apparent that nobody is thinking very much. MCI is a bad business, but that doesn't necessarily mean that its stock isn't cheap. It also offers by itself some characteristics that would be extraordinarily attractive to a cash machine such as Leucadia, including massive net operating loss carryforwards, some sellable noncore operations, and plenty of potential for operational improvements.

None of this is to say that Leucadia's eventual success is assured or that telecommunications has bottomed out and is going to slowly improve as an industry. But a company with substantial liquid assets that is willing to endure the volatility isn't necessarily making a bad move in going in while the floodwaters rage and waiting for the sun to come out. In fact, there may not be a better play on an eventual improvement in telecom than to hold Leucadia. After all, at a minimum its management doesn't have a legacy of incinerating capital by the hundreds of billions.

The S&P's decision not to give Leucadia the benefit of the doubt makes sense on a strict macro level: its short-term risks have certainly increased. But that's about as far as it goes.

Bill Mann owns shares of Berkshire Hathaway and is a former telecommunications executive.