Time to recall my favorite phrase from “Apocalypse Now”, “the Horror”, actually, “The greed!” I will give credit to the author Jon C Oggs for having forseen the Enron debacle and how it could have been saved from happening if the “RATING AGENCIES” did what they were supposed to do. “HISTORY REPEATS ALL OVER AGAIN” – reminds me of Santayana’s famous words – “Those who forget history are doomed to repeat it”
However, as I write this, it occurs to me that while I have read history and claim to know it, I still suffer from the trickle-down effects of the handi-works of the bond insurers. Hopefully, congress will pass a law and also break the “conflict of interest” clause. A rating agency CANNOT be answerable to the public…something like the Federal Reserve!
Police me, police me police me!
~
The following article captures the greed of Moodys and McGrawHills S&P.
http://www.247wallst.com/2007/12/independent-rat.html
Quoting Jon C Ogg’s,
I have personally been on the record stating that if certain Enron transactions were structured differently and adequately rated by the debt ratings agencies AHEAD of the fraud realization (even after the fraud that was occuring there) and without some of the certain debt rating triggers and subsequent stock price triggers that the company would have actually survived as an entity.
And the current times have been beautifully captured by this paragraph towards the end,
The business model has been flawed, and partly responsible for a portion of the mess in the debt markets right now. "Pay us to assign a rating to you, and we'll give you a fair and accurate rating that will allow investors to decide to invest or not. Then we'll charge the public and subscribers to get access to the research."
Another article by the same author, Worthless rating agencies : http://www.247wallst.com/2007/12/worthless-ratin.html
Also, I am a wee-bit surprised that Warren Buffett who bought Moody’s(19% share holder) never foresaw the “rating-mess”…isnt life full of surprises?
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