Standard & Poor's warning this week about U.S. debt led to front-page headlines and (possibly) precipitated a sharp drop in the stock market.
Why the fuss — particularly given the blase response from the bond market, and the beating the rating agencies took in the financial crisis?
S&P and the other big rating agencies are still important. Despite some post-crisis changes, the agencies are still woven into the financial system through laws, regulations and covenants.
And U.S. government bonds are still considered to be among the safest investments in the world. If S&P or one of the other big agencies were to downgrade U.S. debt, it would still be a big deal.