As near as I can tell, the only thing the Gang of Six has made more likely is default. It’s essentially the same deal that Eric Cantor and John Boehner rejected because it included tax increases. Maybe the increases are so vague and the abolition of the alternative minimum tax so attractive that this changes the perception among House Republicans, but I’m not sure why we should believe that. This is the group that passed the Cut, Cap and Balance Act yesterday, for a frame of reference. Indeed, John Boehner’s office said the plan “appears to fall short” of House goals.

What Mason doesn’t realize is that Galtian producer class colossi work in those corporate boardrooms, and they can shrug off debt ratios like so many gnats. Only the sniveling government – which by the way sucks at the government teat, has anybody noticed that? – has a problem with debt.

As James Fallows points out, S&P is basically making a guess, no more informed or uninformed than any observer of politics. No modeling went into this threatened downgrade. “They’re saying they have an opinion on the state of Congressional-White house dealings on the budget,” writes Fallows. “Fine. Go on a talk show or start a blog.”

I get the feeling that we’re sitting on a ticking time bomb, and we’ll replay this all over again soon.

Moody’s economist, Stephen Hess is telling us the risk of holding US debt will rise because of the tax deal, and if we don’t offset this by cutting spending, the US is more likely to default on its sovereign debt. Absolute gibberish.

Can someone tell me why the same guy, at the same ratings agency, does a 180 in less than one week, when the deal hasn’t changed an iota?

As I mentioned yesterday, JPMorgan Chase, one of the nation’s largest banks, has suspended all its foreclosures in states that require judicial approval, while it reviews the foreclosure documents. We have some more information on that today, affecting 56,000 foreclosures.

It’s very important to keep on top of the implementation of the Dodd-Frank financial reform bill, because Congress basically outsourced the writing of the bill to the regulators. There are 67 studies and 200 rules that regulators will have to conduct, enact and implement. And so it’s worth looking into their progress, which has already begun.

An odyssey that started back in December in the House could finally culminate today, with the finishing touches put on the Wall Street reform bill as the conference committee winds up its work. With so many consequential issues still yet to be fully decided, it’s hard to know how to judge that finished product.

The conference committee for Wall Street reform finally got around to the title on credit rating agencies, and we saw a lot of unanimity on the House side for the offer written by Barney Frank, which would retain the language removing references to credit rating agencies from the regulatory code, but which would cancel out the Franken amendment, which would change the issuer-pays model to one where an SEC office would assign initial ratings. The House offer passed on a voice vote with almost no opposition.