Credit ratings agency Standard & Poor's makes an extraordinarily revealing admission in its defense against government charges that it defrauded investors:
S&P said in its request to dismiss the case that the government canât base its fraud claims on S&Pâs assertions that its ratings were independent, objective and free of conflicts of interest because U.S. courts have found that such vague and generalized statements are the kind of âpufferyâ that a reasonable investor wouldnât rely on.
In other words, S&P admits that its claims to do what it says it does are little more than advertising slogansâyou know, like: "More doctors smoke Camels than any other cigarette."
So years ago, when I purchased term life insurance ahead of the birth of my daughter, and evaluated the reliability of insurers based on their credit ratings, I wasn't acting reasonably, according to S&P. Good to know.
Yay for capitalism!