You’ll recall, I’m sure, that the newly formed M. Feierstein Ratings Agency broke the news that France has lost its AAA rating. Although we’re a newly formed agency and, if you want to be pedantic about it, we have only ever issued one rating, nevertheless we like to think of ourselves as a market leader.

Although other ratings agencies have confirmed their AAA rating of France, we would like to call your attention to the fact that no one believes them. Bloomberg’s story, here, calls attention to the fact that:

“Investors aren’t waiting for Standard & Poor’s or Moody’s Investors Service to strip France, Europe’s second-biggest economy, of its top credit rating.

The extra yield demanded to lend to AAA rated France for 10 years was 158 basis points more than the German rate at 11:51 a.m. today. The gap was 200 basis points on Nov. 17, the widest spread since 1990, up from 28 in April. The French 10-year yield was at 3.5 percent, about midway between top-rated Holland and Belgium, which is graded one level lower at Aa1 by Moody’s. French borrowing costs are more than a percentage point above the AAA rated U.K.”

Bloomberg aren’t quite going to say this out loud, but the point is simple. If it looks like a dog, and barks like a dog, and wags its tail like a dog, you can pretty much bet that it IS a dog.

The same thing with bonds. If the markets trade French debt like it’s not really AAA, then that debt isn’t AAA. More scary still, we haven’t yet had a glimpse into the huge losses concealed inside the French banking system. Once those come into the open, we’re going to see that even at their current distressed prices, French bonds have a long, long way to fall. It ain’t over till it’s over – and the fat lady has yet to sing.