The double whammy!

The credit rating agencies have more direct and established relations with the debtors than what any individual anonymous investor in the market has and therefore, almost by definition, they will be much slower than the markets in conveying any bad news. This is something that the AAA-bomb takes advantage of as it produces a great aftershock. First the market prices in the new bad news, and then later come the downgrading that forces the bank to hold more equity and so down goes the market even more. What a blast!