Replacing S&P and Fitch?

The situation in the financial markets is too serious for playing the blame game, but I'm pretty sure where the buck will stop after, hopefully, we get through this. (Hint: it won't be at the Democratic Congress.)

Last year I commented at Dinocrat:

It’s a good thing that the current Treasury Secretary is a hardened Goldman Sachs capo.

Even if Paulson and Bernanke bring us through, I wonder if the Europeans and Asians, with OPEC concurrence, will form their own ratings agencies without whose blessing no American instrument will be acceptable in global financial markets.

Addendum 20081111. Indeed the Europeans are considering forming their own rating agencies. They're also realizing that that may be unnecessary if they take over the American ones: if European regulation of rating agencies is stricter than US regulation, the American entities will have to comply. And the Yanks still take the blame when something goes wrong.

Addendum 20081112. Given the bailout's incompetence (yes, incompetence), special-interest feeding frenzy, opaqueness and stonewalling, and possible malfeasance, it is no longer unthinkable that the US financial position could collapse completely.

On one side of the aisle, we have people who threatened to fire a civil service actuary if he gave his professional opinion about the costs of Bush's prescription drug benefit. On the other side, there are people who want to restore the "Fairness" Doctrine. Given a pretext and irrespective of the merits, neither would hesitate to unleash the full power of the state against an American entity that they disfavored.

The rest of the world might establish a nonAmerican rating entity in order to get proper warning of US default or reduced creditworthiness.