I’m one of the few people standing on Capitol Hill who has not — at least as of yet — been blamed for the S&P ratings downgrade of U.S. Treasuries and related bonds. And I may be the only person on Capitol Hill who isn’t confident that they somehow know what caused the downgrade and, more importantly, who to blame. Seemingly every politician, staffer, pundit, blogger, and crazy uncle in the whole country seems to know the answer to those two questions.

I have but just three points.

1) Anyone who uses any form of the word “obvious” in regard to explaining this is lying. Either that, or they aren’t particularly market-savvy. People who can easily and consistently predict massive market movements do not spend their time writing blogs, or newspaper columns, or talking on cable news shows. They sit around their Olympic-size pool and keep their brokerage firm on speed dial. In fact, when they see something “obvious” and even moderately lucrative, they keep their mouth shut. So if the events of the last week were completely obvious to you, my only question is how much money did you make on it?

2) In Related News, Discount most market predictions you hear. Global markets are pretty liquid, and behavioral trends are ridiculously hard to identify. Those “obvious” situations are rare, even for the best in the business. And this is why you can pretty much discount completely all market predictions you see on cable news, as well as most explanations you see post-hoc about the movement of markets. I’m not a 100% believer in efficient markets, but that doesn’t mean the market isn’t pretty efficient. You’re not getting any info on FoxBusiness that hasn’t already been priced in. In fact, my sense is that the cable news shows tend to reinforce herd mentality (i.e. they seem to encourage people to move their investments to safer vehicles at a time like this, which is, at best, information you should probably discount 100%, and probably worse, since equities are (or will be) trading at a bargain either now or quite soon if you believe in behavioral finance.

3) The political explanations are largely incoherent. Best I can tell, the administration’s explanation is something like this: S&P is crazy, they can’t even add correctly; even if they could, credit agencies are worthless anyway;  our bonds are still AAA in reality, the markets back that up; consequently,  this is a massive, and completely avoidable crisis, caused by the GOP; it would be insane to further empower them. Huh?

My sense is that the modal hard conservative explanation is something like this: this was caused by long-term socialist spending habits, not political instability over the debt deal; while a default would not have been problematic, a downgrade to AA will likely cause huge problems; consequently, this is a massive short-term crisis caused by Obama, Geithner and the Dems;  America is the greatest nation/economy on Earth, for heaven’s sake look at what’s going on in the Eurozone. Huh?