From Davenport, Iowa:

Apr 16, 2011 / 01:17 pm

In Rome in October 2002, while waiting with Catholics from around the world for a papal Mass to begin, Roy and Roberta Wilson believed they saw the Blessed Mother’s hand at work.

As the couple passed time by making knotted cord rosaries, nearby pilgrims showed interest. Members of St. Wenceslaus Parish in Iowa City, the Wilsons tried to teach rosary making to the Catholics, many of whom didn’t speak English.

“Amazingly, they learned the quickest of any group we’d ever taught,” Roberta said. Then, she learned why.

“A man three or four rows behind us said, ‘Praise to Our Lady of the Rosary!’ It was her feast day. So we had some help from her.”

The Wilsons believe Mary has guided them throughout the 14 years they’ve been making and donating knotted cord rosaries, which Roy said have gone to Catholics on six continents. The couple makes 1,200 to 1,300 of the devotional aids each year, and several Catholics who learned the art from the husband and wife also make and donate rosaries.

The ministry has spread further than the Wilsons imagined it would when Roy took up the craft in 1997.

That year he was on a retreat at which a fellow participant, who was often seen carrying cords, piqued his curiosity. “I had to ask, ‘What are you doing?’” The man showed Roy a rosary and asked, “Would you like to learn to make these?”

Roy, who works as a tile setter, learned. “When I got home, I had to make the rosaries; I didn’t know why. I think Our Lady was whacking me around a bit.”

As he continued crafting them, requests poured in from friends, family and fellow parishioners. Seeing he needed help fulfilling those requests, Roberta started making rosaries, too.

Since then rosaries have gone to hospitals, rest homes, mourners at funerals, residents of several foreign countries and, with the help of St. Wenceslaus’ Knights of Columbus, to U.S. troops overseas. The cord rosaries are hard to break, so they’re well suited for children and soldiers, said Roberta, a school teacher.

The most challenging request for rosaries came in 2008 from a Slovakian seminarian who met a friend of the Wilsons while in the United States. The seminarian, now Father Jan Dolny, asked for 600 rosaries for everyone who would attend his ordination Mass — just two months away. Friends and family of the Wilsons ended up helping the couple make 850 rosaries — while praying for each future recipient.

The agnostic boyfriend of one such recipient later went through the Rite of Christian Initiation of Adults, Roberta said. “He was overwhelmed by the idea that someone in a different country was praying for him.”

Brother Erik Ross, a Dominican friar native to Wisconsin, also was moved by gifts of rosaries that the Wilsons sent his community in Poland in 2008. Many of the rosaries went to people whom missionary priests minister to in various countries, Br. Ross e-mailed the Wilsons. “Your generosity, and the generosity of your whole network of rosary-makers, is just astonishing… you are an example and witness to all of us,” he wrote.

Hearing such examples of how rosaries and prayers have touched people keeps the Wilsons going, Roberta said.

Roy agreed. “Realizing I can help promote the faith and bring people closer to God is my reward.” …

Go here for the rest of the story.

From the “It’s Never His Fault” Dept. — “Obama blames speculators for high gasoline prices.” A more complete treatment of Obama’s “It’s Not My Fault” syndrome is here.

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In the Wisconsin State Supreme Court race, David Prosser wins; union thugs lose. Badger State voters will hopefully have long memories if loser JoAnne Kloppenburg demands a recount at state expense. Nice quip from the victorious Prosser: “A funny thing happened to me on the way to my concession speech. The people of Wisconsin told me to tear it up and go back to work. Thank you Wisconsin.”

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So how was the White House informed three days in advance that S&P would downgrade the outlook for U.S. sovereign debt? The Reuters dispatch reporting this (“S&P took most everyone by surprise, although the White House knew on Friday”) gives the impression that it wasn’t given that knowledge through normal channels. Does S&P normally tell debtors in advance of adverse actions before they become public?

Update: At WaPo — “The Obama administration privately urged Standard & Poor’s in recent weeks not to lower its outlook on the United States — a suggestion the ratings agency ignored Monday, two people familiar with the matter said.” It’s nice to see that lobbying for special favors doesn’t always work. You can take it to the bank that if S&P had capitulated, the administration would have trumpeted a “stable” rating as “proof” that everything is okey-dokey.

Update 2: Hot Air has more, with reference to pithy James Pethokoukis at Reuters.

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A must-read, especially for the free trade uber alles crowd: “A Cautionary Tale Of Outsourcing To China: There Is No Recourse, You Could Lose Everything” —

Fellowes Inc., one of the world’s largest makers of office and personal paper shredders, is witnessing the destruction of its business, as its large Chinese manufacturing plant has been shut down by its joint venture manufacturing partner.

The company’s Chinese joint venture firm has barred 1,600 employees from entering the plant, stolen all of its proprietary manufacturing production equipment and forced the venture into bankruptcy. The contracts Fellowes signed with its Chinese production company meant nothing. For Fellowes, there is no such thing as rule of law in China.

Nor is there for anyone else. The Peoples Army is the law.

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At the Wall Street Journal: “U.S. Hurries to Sell GM Stake” —

The U.S. government plans to sell a significant share of its remaining stake in General Motors Co. this summer despite the disappointing performance of the auto maker’s stock, people familiar with the matter said.

A sale within the next several months would almost certainly mean U.S. taxpayers will take a loss on their $50 billion rescue of the Detroit auto maker in 2009.

To break even, the U.S. Treasury would need to sell its remaining stake—about 500 million shares—at $53 apiece.

The last sentence really isn’t true. As Kyle-Anne Shiver indicated several weeks ago, because the bailout benchmark, including tax breaks and the like, is more like $84 billion.

We should also not forget that GM has pumped up its financials with over $1 billion in sent-ahead profit by overstuffing dealer lots with its vehicles. In March, its dealers had 574,000 vehicles on hand (HT Zero Hedge), up from 427,000 a year earlier.

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At the Heritage Foundation, Bill Beach’s “Open Letter to Paul Krugman” can be summarized in three words: “You lie, Paul.”

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At Hot Air, Obama demonstrates that he’s fallen for more leftist folklore — “Obama uses false bridge-collapse argument to argue for more taxes.” Captain Ed’s response:

… the implication that the St. Anthony Falls bridge collapse in August 2007 had to do with infrastructure spending isn’t just ignorant of basic civics, it’s downright false and offensive.

… It’s dishonest in the extreme to use this tragedy as an argument that we neglected our infrastructure, and ghoulish to use the dead for a false political point. Obama should be ashamed of himself.

It would appear that he’s not capable of it.

It’s here.

It will go up here at BizzyBlog on Friday (link won’t work until then) after the blackout expires.

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Here is what will be likely be seen as the “controversial” statement in the column:

Each year, as long as legislated or contractual retirement ages remain fixed while life expectancies quietly grow through improvements in safety, medicine, and manual labor-sparing technologies, the population as whole picks up a couple of tenths of a year of extended lifespan — and, as long as the laws or contracts don’t change, extended retirement. This represents a very real annual “handout.” … One could argue about intent — was it sloth and inertia, or did the politicians realize that they would be creating an ever-growing number of beneficiaries? — but no one can dispute the accuracy of my characterization.

It really isn’t controversial; it’s a fact of life (expectancy).

If we had decided from the very beginning to structure Social Security, public pensions, and Medicare based on the idea that the worker to benefit-receiving retiree ratio could not go below a certain number, we wouldn’t be having any of the unfortunately necessary discussions we’re currently having about salvaging systems that have become fundamentally broken. On the private side, if companies and where involved their unions had thought it through and gradually increased the retirement ages in their plans, we’d have a lot more defined-benefit pension and post-retirement medical plans still standing.

Everyone, “led” by FDR’s Social Security, which was the first major retirement-oriented effort and probably deserves the blame for the retirement age-freezing precedent, knew or should have known that life expectancies were increasing, but no one acted on that knowledge. So here we are. That’s got to change.

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UPDATE: Actually, there is a “cure” for the extended life-expectancy “problem.” It’s known as Obamacare.

From Manchester, NH:

Apr 17, 2011 / 01:14 pm

As a kid growing up in Milton, Massachusetts, Dan Egan used to kneel next to his brothers on the church pews, and hearing that he needed to be saved by Christ, he would wonder, “Saved from what?” In 1990, trapped in a snow cave on a blizzard-wrapped glacier below Mount Elbrus, lacking any food or water and on the verge of freezing to death, Dan got his answer.

As he sits today in the headquarters of Egan Entertainment Network in Ashland, New Hampshire, Dan recalls the improbable journey that brought him to that cave in the Caucasus Mountains, and recounts the even more improbable journey that he has been on ever since. The small office where he sits is as modest in its 1980s ski lodge décor as it is in its lack of self-promotion — not a single trophy, ribbon, or certificate to suggest the remarkable achievements of its proprietor. On the wall hangs a single poster, featuring Dan and another skier launching out the door of a Cannon Mountain tram and flying through the New Hampshire sky. Amidst the scattered ski stickers and DVDs on his desk sit two books: the Bible and Rediscovering Catholicism.

Dan explains how he has fashioned a life and a living by following in the daunting downhill ski tracks of his older brother John. Together the two renowned extreme skiers used their entrepreneurial instincts and filmmaking talents to travel the world “in search of steep.” Branded “The Egan Brothers,” they reached speeds on skis that left sanity a distant third. They ascended heights accessible only by helicopter, tumbled through cavernous, rock-lined ravines, averted avalanches by split seconds, and flew in the air like projectiles, landing — nearly every time — on their skis, laughing and living to ski again another day.

On that May morning in 1990, high in the Caucasus of Russia, Dan had left his brother John far behind, pushing on in his exuberance towards the summit of Europe’s highest peak. He was mindful of a storm approaching from below, but was feeling, if not invulnerable, at least lucky. …

Go here for the rest of the story.

On Monday, the New York Times assembled a panel of alleged experts in its Room For Debate section. Each weighed in on Monday’s ratings agency outlook downgrade by Standard and Poor’s in an item entitled “Is Anyone Listening to the S.&P.?” (Don’t ask me why “the” is there. It shouldn’t be; the item is about the firm Standard and Poor’s, not “the” Standard and Poor’s stock index.)

One of the contributors was Yves Smith. Ms. Smith “writes the blog Naked Capitalism. She is the head of Aurora Advisors, a management consulting firm, and the author of ‘Econned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism.’”

Wait until you read Ms. Smith’s reaction to S&P’s move after the jump (bold after title is mine):

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The Associated Press’s Derek Kravitz seems to have a difficult time quoting government statistics without rewording them. This is a far from harmless habit.

Tuesday, Kravitz the Creative reported on the Census Bureau’s information release on March homebuilding industry activity. His first two paragraphs and the story’s headline (y’know, the parts that are more likely to be read over the airwaves or seen by readers in a hurry) told us that “new-home construction” increased by 7.2%. Either the poor chap believes that “housing starts,” which is the only number which increased to that degree, is a synonym for “new-home construction,” or he was trying to put a prettier face than deserved on a set of depressed industry data that barely showed a pulse.

After two cheery paragraphs, Kravitz segued into communicating the truly pessimistic nature of the housing industry these days, and noted two pieces of information which virtually prove that “new-home construction” did not increase by the percentage stated — if it increased at all.

Here are several paragraphs from the AP report (bolded paragraph is where the two contradictory data points are found):

New-home construction increases 7.2 pct. in March

Builders broke ground on more new homes last month, giving the weak housing market a slight boost at the start of the spring buying season.

Home construction rose 7.2 percent in March from February to a seasonally adjusted 549,000 units, the Commerce Department said Tuesday. Building permits, an indicator of future construction, rose 11.2 percent after hitting a five-decade low in February.

Still, the building pace is far below the 1.2 million units a year that economists consider healthy. And March’s improvement came after construction fell in February to its second-lowest level on records dating back more than a half-century.

… A sign of the battered industry is the number of new homes finished and ready to sell dropped in March to a seasonally adjusted 509,000 units, the lowest level on records dating back to 1968. And the number of homes now under construction has fallen to a four-decade low.

“Housing starts remain at an extraordinarily depressed level,” said Dan Greenhaus, chief economic strategist at Miller Tabak + Co. “To put this in further perspective, a doubling of (new homes) from here would still put starts at the lowest level of any other recession.” During previous housing recessions, in the early 1980s and 90s, new home construction fell to more than 1 million homes per year. This year’s pace is slightly more than half those levels.

And the lack of any meaningful rebound in housing is stunting the broader economic recovery. In past modern-day recessions, housing accounted for 15 to 20 percent of overall economic growth. In the first post-recession year, between 2009 and 2010, housing only contributed 4 percent to economic growth.

Since the mid-part of last year, home construction and sales have instead detracted from the economy.

So, is it conceivable that Kravitz might be lucky and “new-home construction” activity really did increase in a single month by a seasonally adjusted 7.2%? Almost definitely not, and Kravitz himself told us why.

First, as the AP reporter told us, the seasonally adjusted number of units under construction in March, at 423,000, was actually 1,000 units fewer than February’s 424,000, and a 40-years-of-recordkeeping low. It’s highly doubtful (I’m being polite; the correct term is “virtually impossible”) that builders were somehow able to put an average of 7% more work into each of the units under construction in March than they did in February.

Second, Kravitz himself also noted that the number of finished homes available for sale came in at an all-time recordkeeping low. So it’s not as if a lot of units came out of the “under construction” category and moved into being ready for sale.

Indirect proof that seasonally adjusted construction activity couldn’t possibly have increased by over 7% is found in data at the Bureau of Labor Statistics, which tells us that only 600 seasonally adjusted jobs were added in residential construction in March, bringing the total to 566,500. That’s an increase of 0.11% in the seasonally adjusted workforce. For builders to have increased “new-home construction” by the level represented in the AP’s headline and Kravitz’s second paragraph, everyone in the industry would have had to have been 7% more productive in March than they were in February. Sure, Derek.

Last month (as seen here at NewsBusters; at BizzyBlog), Kravitz reported on existing-home sales without ever referring to, well, existing-home sales, even though the related reports coming the National Association of Realtors have titles containing the words (surprise) “existing-home sales.” Kravitz the Creative instead continually referred to “previously occupied homes,” which could have given some readers the impression that the numbers did not include homes which had been vacant for an extended time.

Here’s a suggestion, Derek: Use the words actually contained the reports, and try to inform your readers instead of misdirecting them. If you want to be creative, take up painting.

Cross-posted at NewsBusters.org.

… Grete Waitz.

Readers who don’t know who she was owe it to themselves to learn. The NYT obit is exceptionally well written.

Today’s Regional and State Employment and Unemployment release by Uncle Sam’s Bureau of Labor Statistics shows that conditions for Buckeye State workers are improving. Of course, there’s going to be a tug of war between ex-Governor Strickland and current Governor John Kasich for credit. In a sense I don’t care, because I just want to see things get better, but if were going to pin the credit on someone, it would not be Donkey Ted.

Some of the numbers:

• (Table 3) Ohio’s seasonally adjusted unemployment rate was 8.9% in March, just barely above the nation’s overall rate of 8.8%. February’s rate was 9.2%. I don’t have time to fully check this, but I’m pretty sure it has been a very long time since the state and national rates have been so close (Note: I stand corrected on this point, as November’s 9.8% Ohio rate was the same as the national rate; however, the next sentence remains true, and has been generally so for at least several years, as seen in Comment 2 at below.) More typically, Ohio’s rate has been a half-point to a full point higher.
• (Table 4) The raw unemployment rate (i.e., not seasonally adjusted) is 9%, down from 9.8% in February. That 0.8% one-month drop compares with last year’s February-March drop of 0.5%, from 11.5% to 11.0%. Only Kentucky (from 11.2% to 10.2%), New Mexico (8.8% to 7.4%), and Oklahoma (7.4% to 5.7%) had larger raw one-month drops.
• (Tables 3 and 4) The out-of-state exodus and workforce dropout phenomena seen during the Taft and Strickland eras may be coming to a halt. The seasonally adjusted workforce was essentially the same in January, February and March, while the number of unemployed dropped by about 25,000. That means that the unemployed were finding work in Ohio, not leaving the state in hopes of finding it elsewhere or dropping out and giving up. Not seasonally adjusted, the workforce grew by 2,800 in March, while the number of unemployed dropped by a very impressive 47,700.
• (Tables 5 and 6) More Ohioans are working. The seasonally adjusted Establishment Survey of businesses shows a 2,200-job pickup in March. The month’s not seasonally adjusted increase (i.e., the actual increase in the number of people found working) was 20,200.

Strickland defenders who want to claim hangover credit for the improvements described are going to have to point to some kind of policy specifics driving this improvement. Good luck with that.

The more likely answer is that after seeing November’s election results, Ohio’s businesses and out-of-state businesses looking to locate or expand in Ohio realized that Buckeye State would finally be open for business again, and that taxes will probably not go up, even as Governor Kasich and the General Assembly wrestle with the $8 billion millstone Ted Strickland hung around their necks as he left the Governor’s mansion. Expectations matter; expectations have improved, and it appears that opportunistic businesses are acting on those expectations.

But, as is said frequently elsewhere: Faster, please.

Today at the Cleveland Plain Dealer, Reginald Fields has a lengthy write-up on Kasich’s first 100 days. Bottom line, to me: Kasich on substance is on track to accomplish a lot, though his style is sometimes lacking (as I noted here back in February). I’ll take the latter if it gets me lots of the former; I’ll bet that most beleaguered Buckeye Staters who have endured 12 years of Taft-Strickland drift would agree.

In an editorial last night (bolds are mine), IBD offers a contrast between how Palin and the President have treated their opponents:

Sarah Palin hit it out of the park in a speech this past weekend in Wisconsin. She dazzled because, of all things, she reached out to her opponents. When was the last time we saw that coming out of the White House?

Amazingly, Palin’s words offered common ground between Tea Party taxpayers and public employee union members, who’ve until now been at odds with Wisconsin Gov. Scott Walker’s attempt to balance the state budget.

“What I have to say today I say it to our good patriotic brothers and sisters who are in unions … a pension is a promise that must be kept. Now, your Governor Scott Walker understands this. He understands that states must be solvent in order to keep their promise. And that’s what he’s trying to do. He’s not trying to hurt union members. Hey, folks, he’s trying to save your jobs and your pensions!”

In short, she came to save, not to cut, and in the finest example of bipartisan bridge-building since President Reagan made allies of blue-collar workers, she reached out to the very people whose hirelings tried to drown her speech out with obscenities.

Palin paid no attention to the thugs and kept her eye on the common ground. She put her finger on the two things that matter most to workers across the country — saving their jobs and their pensions — and decisively linked it with the reduction in the size of government sought by the Tea Party taxpayers.

As philosopher Eric Hoffer once noted: The elegant way to solve a problem is to take one and use it to solve the other.

Palin didn’t rest there, though. She put her finger on the real problem: union bosses, who, like AFL-CIO President Richard Trumka, brag about their daily contact with the White House as if to say they have President Obama in their back pocket.

Meanwhile, the editorial notes, President Obama invited Paul Ryan to sit in the front row at his most recent budget speech, and then proceeded to lie about Ryan’s plan:

“Their vision is less about reducing the deficit than it is about changing the basic social compact in America,” Obama said. And, in a stunning bit of mendacity, he warned that “children with autism or Down’s syndrome” would suffer against “every millionaire and billionaire in our society.”

These are divisive words, favorites of Marxist-Leninist class warfare — the kind that drove nations like the Soviet Union to the verge of bankruptcy.

The Down’s syndrome reference was also a direct shot at Palin herself, giving away just how scared the left is of Sarah Poise. They should be.

A video of Palin’s speech is here at Breitbart.

From Steubenville, Ohio:

Apr 17, 2011 / 06:07 pm (CNA).- The Franciscan University of Steubenville has announced that its chancellor and past president Father Michael Scanlan will retiring on June 30, 3011. Dr. Alan Schreck, a professor of theology at the school described how the 79-year-old priest took a leap of faith to renew the school’s Catholic identity.

“He saw his appointment as an opportunity to step out in faith, and do something radical – because a radical solution was needed,” Schreck told CNA. In 1974, the school was a “typical Catholic college,” suffering from cultural and financial upheavals. But the Franciscan priest set out to “make Jesus Christ the Lord of the campus in every aspect.”

“Fr. Michael said we had to establish a clearer Catholic identity, both in the campus life and in our academic offerings,” explained Schreck, who has taught at the school since 1978. In this way, the school took a different path from many other Catholic institutions of its day. “They began hiring people who were solidly Catholic and believed in faithfulness to the magisterium.”

“The rest is history,” said Schreck. Fr. Scanlan was president for 26 years, and has now been chancellor for 11 years.
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As night follows day, the press is beginning to go after a business entity which had the nerve to do its job and call attention to Uncle Sam’s dire fiscal situation.

Standard and Poor’s is presumably not 100% populated with angels, but it didn’t deserve the gratuitous and ignorant shots fired at it this evening by the Associated Press’s Bernard Condon and an “expert” he quoted. In attempting to tar the firm, Condon acted as if the mortgage-lending mess was the creation of “banks” which marketed mortgage-backed securities and asleep at the switch ratings agencies. He didn’t once mention Fannie Mae or Freddie Mac, the fiasco’s Democratic crony-run uber-culprits, which for 15 years consistently deceived the markets about the quality of the already marginal loans underlying the securities they issued .

Here are selected paragraphs from Condon’s cracked creation, including a headline which gives away a resentment that the ratings agencies are still actually able to do what they were designed to do (bold is mine):

Even after missteps credit raters wield much power

News that Standard & Poor’s was cutting its outlook on U.S. debt rattled financial markets Monday.

Cooler heads might recall that this is the same agency, along with Moody’s Investors Service, that told investors that billions of dollars of securities tied to iffy home mortgages were safe bets – right before they collapsed and helped set off the biggest financial crisis since the 1930s.

“It’s a sad state of affairs when one of the agencies that blew up housing is telling the U.S. to get its fiscal (affairs) in order,” said money manager Michael Lewitt, who lashed out at high U.S. debt in his book “The Death of Capital.”

“They’re not wrong here, they’re late,” he said.

S&P spokesman Catherine Mathis said the agencies were “very good” at rating government debt, citing a recent International Monetary Fund report. It found that all the government debt that defaulted since 1975 had received a rating of “non-investment grade,” or what’s called “junk,” at least a year earlier.

… The upshot: In deciding who gets to borrow, how much and how cheaply, S&P, Moody’s and Fitch Ratings, another big rater, wield enormous power.

After the housing crash, some critics dismissed ratings agencies as useless. But they still move markets. S&P’s opinion on Monday helped push down the Standard & Poor’s 500 index 1.1 percent. Treasury prices initially fell on the news, but later recovered. The yield on the 10-year note fell to 3.38 percent from 3.41 percent late Friday.

… Critics say raters are likely to err on the side of optimism when reviewing bonds because they are paid by companies selling bonds, not by those who buy them as was the case in the 1970s. According to a report published last week by the Senate Permanent Subcommittee on Investigations, raters delayed slashing their ratings on disastrous mortgage securities for fear of angering the banks that were marketing them. One of the authors, Sen. Carl Levin, D-Mich., has said that this model is akin to allowing one of the parties in a court case to pay the salary of the judge.

S&P’s Mathis said getting issuers to pay, not customers, is best because it allows ratings to then be distributed to all investors for free, resulting in more “transparent” markets.

The failure to mention Fan and Fred in discussing the mortgage-lending mess is like covering the state of the personal computer industry without bringing up HP or Dell.

Fan and Fred caused the financial crisis in two key ways. The first is fairly well understood by many; the second has, in my opinion, been deliberately ignored by the establishment business press because it clearly identifies the two government-sponsored enterprises and the Democratic Party apparatchiks who ran them as creators of the crisis they insist on laying at the feet of “Wall Street.”

First, Fan and Fred deliberately lowered the credit-score approval thresholds for conventional and subprime loans it would agree to purchase from originating lenders, thereby taking on a gravely dangerous level of risk. The follow graphic overlays the two entities’ key decisions — to move the conventional loan threshold from about 670 to 630 and the subprime threshold from about 630 to 590 — on a contemporaneous chart showing the likelihood of consumers going 90 days delinquent on debt for various score ranges (Fair Isaac, or FICO, is the largest provider of credit-scoring software):

Once Fan and Fred took these actions, banks had to follow suit or get marginalized out of the mortgage-lending business.

Second,  the two government-sponsored enterprises routinely deceived the ratings agencies and thus the securities markets about the underlying quality of the mortgages backing their securities. Specifically, a December 2009 Wall Street Journal article by Peter J. Wallison relayed the following shocking finding:

“… Edward Pinto, a former chief credit officer for Fannie Mae and a housing expert, has found that from the time Fannie and Freddie began buying risky loans as early as 1993, they routinely misrepresented the mortgages they were acquiring, reporting them as prime when they had characteristics that made them clearly subprime or Alt-A.”

As I wrote in January 2010 (bolds are mine):

It’s bad enough that Fan and Fred lowered the loan approval thresholds. Pinto’s point is that for 15 years, they doubled down by “routinely” misclassifying approved loans, effectively telling the capital markets and the public that these loans weren’t as risky as they really were. Because of this, securities backed by these mortgages carried lower interest rates than they would have if the risks had been properly disclosed. Some of the offerings should probably never have been issued, or should have been given junk-bond pricing. Further, misrepresented loans Fan and Fred kept on their books enabled the two entities to continually make false claims of financial health.

Memo to Bernard Condon: The blame for this far more important second factor cannot possibly be laid at the feet of Standard and Poor’s, Moody’s, or the other ratings agencies.

PS to Mr. Condon: It’s also not S&P’s fault that the current administration, with the help of the Democrat-controlled Congress in 2009 and 2010, ran up the national debt to its current level of over $14 trillion. If you’re looking for “missteps,” please start there.

Cross-posted at NewsBusters.org.

From CNN:

Standard & Poor’s lowered its outlook for the nation’s long-term debt Monday, based on the uncertain political debate around the nation’s fiscal problems.

The outlook means that there is a one-in-three likelihood that it could lower the long-term rating on the United States within two years, S&P said.

Larry Kotlikoff’s 6-1/2 years of breathing space referenced last week seems optimistic now, doesn’t it?

Here’s Treasury’s reax in the CNN item:

“We believe S&P’s negative outlook underestimates the ability of America’s leaders to come together to address the difficult fiscal challenges facing the nation,” said Mary Miller, the Treasury’s assistant secretary for financial markets.

Miller argued that dealing with the current fiscal challenges is “well within our capacity as a country.” She noted that Obama has called on Congress to begin developing a deficit plan next month, with the aim of reaching a legislative framework by June.

We have done nothing in the past two-plus years to demonstrate the existence of that capacity.

James Pethokoukis:

Washington types keep telling me that Americans really don’t care about the debt issue. But I think this warning — not to mention an actual loss of the AAA rating — is yet another data point that will sink into our collective head — right along with a trillion-dollar deficit, the EU debt crisis and our financial meltdown which shows too much debt can cause wealth to disappear in a flash.

It’s already sunk in — almost everywhere but Washington.