LARD HAT

I’m not sure who Rob Delaney is. Some sort of Twitter celebrity, it would seem.

He’s right about most of his points, and buying an index fund of American stocks certainly isn’t a bad idea. I have one, and I’m just a hard-working 28-year-old expat who isn’t even a twitter celebrity.

However, he’s being pretty naive when he says, basically, ‘I don’t care what Standard and Poor’s thinks, and you shouldn’t either.’

Fortunately and unfortunately, I live in Spain, a country that Standard and Poor’s could sink into bankruptcy with a ratings downgrade.

For the last two years, every variation of the interest rate Spain pays relative to Germany is big news: Spain lost AAA in 2009, we’re living with over 20% unemployment, and S&P isn’t helping matters at all by threatening to lower the rating again if the government doesn’t improve austerity measure after austerity measure. 

These ratings downgrades become self-fulfilling prophecies, as countries have to pay more interest, which causes a debt crisis where there wasn’t necessarily one before. Rising interest rates can make life difficult for countries as well as families.

So sorry, Rob. Maybe over there (for now) you can just glibly ignore the credit rating. Here it’s a different story.

ashponders:

robdelaney bought some stock. You should certainly read why.