Huns and Vandals at the Gate

Where is Pope Leo I when we need him? The sainted pontiff was able to persuade Attila the Hun not to sack Rome in 452 A.D. Would that he would appear at Wall and Broad Streets and stand athwart history yelling “Stop!” Alas, the Vandals sacked Rome a few years later anyway and the Dark Ages were well on their way.

On the first trading day following Standard & Poor’s downgrade of U.S. sovereign debt to AA+ from AAA, which would imply higher interest rates because Treasury paper was now deemed less secure by the S&P Pooh-Bahs, investors flocked to the tarnished instruments sending their already paltry yields still lower.

Perhaps cynical investors reasoned that any agency that had rated “toxic waste” mortgage securities Triple-A could hardly be trusted with assessing the creditworthiness of the world’s largest economy.

But that wasn’t the reason. The real driver is the economy, stupid, to borrow the Clinton campaign mantra. Equity prices have fallen precipitously and government debt prices have risen not because S&P pointed out the obvious. Granted, the move by the rating firm may have had a difficult to measure psychological effect, but the outlook for economic growth is so tenuous that the S&P action, as so often is the case in momentous moves in asset prices, was just an excuse to dump shares.

Buttressing the outlook for anemic growth was the sharp decline in oil prices. S&P didn’t downgrade West Texas Intermediate crude.

Making matters worse is that President Obama is no FDR much less Pope Leo. “I welcome their hatred,” Roosevelt said of the Tea Partiers of his day. Or take Leo’s tack with Attila: “Now we pray that thou, who hast conquered others, shouldst conquer thyself. The people have felt thy scourge; now as suppliants they would feel thy mercy.” We prefer the former. The latter would only encourage the Vandals to complete the rout of the New York Sack, er, Stock Exchange, that is.

Having sworn off the stock market, we note a big win in the sporting realm Saturday, when 500 units on the Scarlet Metacarpals paid 700 units to bring the kitty back to 3,000. Tonight we’ll go against the bloody ankles from Boston with 500 units on the host (ess)Twinkies, for entertainment purposes only.

Note well, we shall delve into the mysteries of the Canadian Football League later in the week, you hosers.