S&P is so slick! The credit-rating agency has comically put rival Moody's on its watch list for a downgrade, replete with a lecture about how reform legislation (that applies to both firms) will devastate Moody's, only. Oh, it's on now.

It's kind of funny, reading S&P's warning to its chief rival that it would presumably love to put out of business. There seems to be no acknowledgment from S&P that it will have to deal with the same very, very light glazing of new regulations. The tone is basically, "Yeah yeah yeah, look: Moody's sucks and will fail, just trust us... we're better."

The primary danger cited is the threat the bill poses by making it easier for investors to sue ratings agencies for providing bad information.

"Moody's management has stated that it plans to adapt its business practices in an effort to partially offset any potential new litigation risks associated with the legislation," S&P said. "Nevertheless, we believe that Moody's may face higher operating costs, lower margins, and increases in litigation-related event risk, which would likely increase its business risk."


In many parts of the note, S&P may as well have been talking about itself.

It noted the legislation would hit the industry in general, in part by removing references to agencies in regulations and thus decreasing investor need for them. New global regulations and industry risk are other factors cited.

That S&P is so catty. How many hours will it be until Moody's downgrades S&P to junk with a press release saying, "buh-bye, assholes"?