No? You don't recall Standard & Poor's, Moody's and Fitch telling us in advance about the risks and dangers of the deteriorating value of subprime loans and US securities tied to the housing market?

You can't recall these warnings because they never happened.

In the years before the crisis, the rating agencies gave no warning of a crash. In fact, they gave AAA credit ratings to credit-default-swap securities and derivatives that they had no way of accurately assessing.

Investment banks and other institutions sought and paid for positive credit ratings and the agencies were happy to give them what they wanted.

Nevertheless, today, financial markets continue to pay homage to these agencies' assessments.

As early as 2002, legendary US investor Warren Buffett called the investment banks' derivatives "toxic" and said they were time bombs that could cause a chain reaction of financial disaster. The next year, he said they were "financial weapons of mass destruction".

But that wasn't enough to discourage the rating agencies.

Keep this in mind as you consider the publicity given to Standard & Poor's recent statement, lowering Australia's credit rating outlook from stable to negative.

"The negative outlook on Australia reflects our view that prospects for improvements in budgetary performance have weakened following the recent election outcome," S&P said.

We pay attention to such statements because they might make lenders more wary and cause them to demand higher interest rates before parting with their funds.

The gamblers who play our financial markets react sharply to such things, as they do to just about any reading of the entrails.

But what of the fundamentals?

First, the S&P assessment is based on its reading of the election outcome. The agency concluded that the Turnbull government, without a majority in the Senate, will not be able to rein in the deficit.

But another possible scenario, posited by former Finance Department deputy secretary Stephen Bartos, is that the disparate forces in the Senate could reject the Coalition's tax cuts for big business and accept the Coalition's superannuation reforms. Add in a few other tax reform savings, and the government's got budget repair.

Not having a majority in the Senate can modify excessive behaviour, while still allowing major tax changes. All budget scenarios depend on a host of assumptions. Success will depend first and foremost on the negotiating skills of Malcolm Turnbull and his team. And whether the rating agencies give the government credit for any progress remains to be seen.

The agencies' ratings have the potential to seriously damage any country's ability to function effectively.

At present, there is good reason to question S&P's judgment on our credit rating and outlook as compared with others.

Germany, for example, has a AAA credit rating and a stable outlook, but its government debt to GDP ratio is almost twice ours. Singapore also has a AAA rating and a stable outlook, while its government debt to GDP ratio is three times ours. It's a big ask to make us believe that the political and economic situation in Germany and Europe is, in general, more stable than that in Australia. 

So much for objective analysis.