Friday, 8 February 2008

The Coming Collapse of International Credit Ratings Agencies - Moody's, Standard & Poor, and Fitch

The problem, the challenge, the scandal, is not that the bond insurers are about to be downgraded. The real scandal lies in the fact that they haven't been downgraded a long time ago - and much deeper than from "AAA" to "AA". In fact, what needs to be downgraded are the major international credit ratings agencies, Moody's, Standard & Poor, and Fitch.
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Why do they need to be downgraded? Because the top three or four ratings agencies are ridiculously behind the curve when it comes to letting investors know about problems with the entities whose credit standing and investment outlook they (pretend to) rate. The reason for that appears to be an unresolvable conflict of interest which emanates from how these agencies get paid. They get paid for their services by the companies (and governments) whose performance they rate.

http://www.marketoracle.co.uk/Article3625.html

A "corrupt" system is unravelling.

Sometimes it pays to be fairly objective about certain financial positions doesn't it ?

More economic upheavals to come.

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