The WSJ details:
After two hours of analysis, Treasury officials discovered that S&P officials had miscalculated future deficit projections by close to $2 trillion. It immediately notified the company of the mistakes.
S&P officials later called administration officials back to say they agreed about the mistakes, though they didn't say whether it would affect the rating. White House officials remained waiting Friday evening to see what the company would do.Which brings me to a simple question (ignoring the mess that the U.S. truly is in) after mucking up ratings on mortgages (i.e. thinking housing prices could only go up / being in bed with the originators), then throwing the babies out with the bath water (i.e. downgrading even high quality non-agency mortgage securities) once they realized they missed the ball the first pass, how is it possible that S&P (and one sure to be fired analyst) has this much power over the U.S. and the global financial system?
But, what's $2 trillion... the U.S. was downgraded anyway. Per FT:
After quite incredible reports of miscalculations, it happened. The thing that is perversely both meaningless and full of meaning was announced on Friday evening New York time. The United States of America is now rated AA+ with negative outlook by Standard & Poor’s.