From Alarcon's lips...

The councilman doesn't think much of S&P's decision to lower the city's general fund credit rating from AA to AA-. The move follows earlier downgrades by Moodys and Fitch. From the Daily News:

"These are the same people who gave Lehman Brothers a good rating just before they went under," [said City Councilman Richard Alarcon]. "The credit rating agencies, who I despise, are only concerned with getting money to Wall Street. What are they going to do when we dip into our reserves? They are going to hammer us again. We should not take actions just because of them."

Thing is, Wall Street investors still rely on the ratings agencies to steer them towards bond picks. How else does a guy from NY or Boston figure out what's happening in L.A., especially when he's having to pick among dozens of other municipalities? By the way, AA- and A+ are still pretty good ratings, well within the parameters of investment grade. The downgrade, however, does mean that it will cost a little more to borrow - and it confirms to the markets that L.A. does not have its act together.