FT Alphaville ¬ª Moody’s warns on US finances.
Credit rating agency, Moody’s Investor Service, will fire a warning shot at the US on Monday, saying that unless the country gets public finances into better shape than the Obama administration projects there would be “downward pressure” on its triple A credit rating.
I still find the absurd confidence of the rating agencies in the light iof their own abject failures quite extraordinary.
Surely, the fact that they say that an adminsitration has got soemthing wrong should give us clear indictaion of the exact opposite. Isn't that what any rational person would think?
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Is there not a common theme between your last thread about E&Y and this one?
E&Y audited Lehman Brothers. Lehman Brothers traded in CDOs and other derivatives.
Some of the credit rating agencies rated the credit worthiness of many of those financial products.
E&Y is now being investigated over its role in the collapse of Lehman Brothers.
So why has no-one so far investigated the role of credit rating agencies in the valuing of the financial products that Lehman Brothers traded in?
Were any of the credit rating agencies negligent or complicit in allowing some of these financial products (like CDOs) to be overvalued? Could they then be sued if they were?
Given the power that some of these agencies seem to have to dictate bond yields etc, is it not time to clip their wings a bit, and make them more accountable for their actions?