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Gayle in MD
09-28-2010, 09:38 AM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> What happened to Moody's is what happens to every "agent" who thinks he can serve two masters. The sad thing is that it keeps happening, even though we've seen this movie before.

Credit rating agencies are supposed to monitor debt that's issued by financial institutions and governments. It's their job to protect investors from purchasing financial instruments that are misleadingly packaged or are riskier than the buyer can afford. These "agencies" hold extraordinary power -- to destroy companies, to make people fabulously rich, even to influence governments.

The problem is they're not "agencies" at all. They're for-profit companies who have their palms outstretched to the big banks for revenue even as they're "policing" the soundness of their portfolios.

Consider the recent checkered past of Moody's, which holds a 40% market share in the worldwide credit rating business. Allegations have been raised about its CEO's stock trading, harassment of a whistle blower, and intentional deception of the public for its own financial gain. It got everything wrong when it came to rating debt, despite reports it should have known all along.

How is Moody's handling the public shame caused by its ignominious failures? By lecturing the government on how to handle the disaster its own ratings helped to create.

The Moody's File

The SEC declined to file fraud charges against Moody's last month, not because they thought the "agency" was innocent -- the evidence showed otherwise -- but because it said there was a jurisdictional problem. As the SEC's report made clear, Moody's knew a number of credit ratings had been incorrectly rated too favorably. But rather than face the public embarrassment of admitting its mistake, Moody's let the public believe the ratings were accurate. Moody's looked the other way as investors were placed at risk, twiddling its thumbs and whistling to itself like a crooked cop ignoring a robbery.

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Rest of this story here:
http://www.huffingtonpost.com

LWW
09-28-2010, 11:09 AM
No argument there.

LWW

jimmyg
09-28-2010, 01:39 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: LWW</div><div class="ubbcode-body">No argument there.

LWW </div></div>

Nor here.

J