Of course we're paraphrasing. Regardless, this is in essence what the Federal Reserve, the FDIC, the NCUA and the Comptroller of the Currency said, translated, in a joint press release, issued way into the night on a Friday.

Earlier today, Standard & Poor's rating agency lowered the long-term rating of the U.S. government and federal agencies from AAA to AA+. With regard to this action, the federal banking agencies are providing the following guidance to banks, savings associations, credit unions, and bank and savings and loan holding companies (collectively, banking organizations).

For risk-based capital purposes, the risk weights for Treasury securities and other securities issued or guaranteed by the U.S. government, government agencies, and government-sponsored entities will not change. The treatment of Treasury securities and other securities issued or guaranteed by the U.S. government, government agencies, and government-sponsored entities under other federal banking agency regulations, including, for example, the Federal Reserve Board's Regulation W, will also be unaffected.

Basically they are saying S&P, you will have no effect on the United States, our bonds or any other financial instrument and private sector associated with the United States.

CNN interviewed S&P about their downgrade decision in the video below. Notice the resolve as well as the nervousness in the voice. Who can argue that Congress is bouncing off the walls, but is that reason to downgrade the United States of America?

S&P managed to crash news servers on Friday night, get the Federal Reserve out of bed, cause the G7 ministers to meet, ensure Obama will lose re-election (according to Bloomberg), damage the reputation of Congress and wake up Paul Krugman to go write a blog post:

everything I’ve heard about S&P’s demands suggests that it’s talking nonsense about the US fiscal situation. The agency has suggested that the downgrade depended on the size of agreed deficit reduction over the next decade, with $4 trillion apparently the magic number. Yet US solvency depends hardly at all on what happens in the near or even medium term: an extra trillion in debt adds only a fraction of a percent of GDP to future interest costs, so a couple of trillion more or less barely signifies in the long term. What matters is the longer-term prospect, which in turn mainly depends on health care costs.

So what was S&P even talking about? Presumably they had some theory that restraint now is an indicator of the future — but there’s no good reason to believe that theory, and for sure S&P has no authority to make that kind of vague political judgment.

In short, S&P is just making stuff up...

My, my, what three little letters can do, oops scratch that, two and a plus. All hail the credit ratings agencies for seemingly they have more power than all of the nation-states around the globe.