Who Cares About Credit Rating Agencies?

Yesterday, Standard & Poors cut the credit rating of the Netherlands from AAA to AA+. Market reaction? Dutch yields fell marginally, from 2.03% to 2.027%. Similar previous downgrades of the United States and France was similarly not followed by an uptick in yields. This is a sign that very few or nobody cares about them anymore, and to the extent they do it is only because government regulation forces companies to use the ratings when valuing assets in their balance sheets. And that is good and rational, considering their awful track record.