Posts Tagged ‘credit rating agencies’

The New Credit Sheriff

Tuesday, July 13th, 2010

China’s got a new credit ratings agency, and the grades are a bit different!

Top sovereign credit, AAA?

Norway, Denmark, Switzerland, Singapore, Australia, New Zealand

Nearly there, AA+?

China, Germany, Netherlands, Canada

AA or below?

United States, France, Britain, Italy, Malaysia

Stating the bleeding obvious:

“The reason for the global financial crisis and debt crisis in Europe is that the current international credit rating system does not correctly reveal the debtor’s repayment ability,” said Guan Jianzhong, Dagong’s chairman.

Gorilla says: “We’re all Chinese subprime now!”

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Is The USG Subprime?

Monday, March 15th, 2010

In a word: No!

It’s difficult to understand the mania about reducing the deficit at a time when the output gap’s a couple of trillion, unemployment’s at 10%, and the world economy outside China isn’t growing at all.

It’s equally difficult to understand why anyone pays serious attention to the remarks of the credit rating agencies, whose total conflict of interest and totally dishonest “ratings” helped pave the way for the housing bubble and subsequent financial meltdown.

Instead, our leaders should be using the cheap cost of borrowing to finance projects that will fix the infrastructure and put people back to work: things like pipes and sewers!

Gorilla thinks: “We get another sack of shit from Moody’s and the pipes are clogged!”

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How Credit Rating Agencies Really Work

Wednesday, February 10th, 2010

In the old days:

1) You pay us and we’ll say good things about the junk you’re selling.

Today:

1) You pay us and we’ll say bad things about your financial position unless we can be assured the government will bail you out again.

So, Citibank, BofA, Goldman Sachs, and Morgan Stanley have their ratings downgraded.

Uncertainty is now defined as the chance that government may decide at last to rein in the banks’ power, although the evidence so far is there’s little chance of that happening.

Gorilla says: “Shave and a haircut? Six trillion bits!”

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No Stars

Tuesday, December 8th, 2009

The credit rating agencies, who contributed so much to the ongoing financial disaster with their worthless, conflict-ridden ratings, are back to business as usual.

Seems there’s no political will in the Congress, either to set up a new, independent agency or to establish rules that would clamp down on conflicts of interest.

This is hardly surprising, since the Congress is doing essentially nothing about “too big to fail” banks or having the taxpayer finance massive pay packages for the zombies we are keeping on life support.

Gorilla says: “Why regulate the people whose contributions are keeping you in business?”

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