Mar 24, 2010
Rating Agencies
“prompting the rating agency Moody’s to threaten a downgrade in America’s bond ratings”
I am not an economist or an expert in finance, rather I am a soil scientist, but I am wondering from the outside looking in why you all even put any stock in the rating agencies any more, Didn’t Michael Lewis in “Panic” and elsewhere thoroughly debunk the validity of these completely subjective TripleA ratings? I am not implying that the US economic standing is not teatering….it is indeed! But to rely on one of the “Big 3″ to validate such a claim….well that would not have held water if I were to try to defend it to my dissertation committee. Just a thought.
Two things I have learned since this crisis about regulation…Its all about the Big 3:
1. Federal Accounting Standards Board (FASB) is basically run by Ernst & Young, KPMG, and Deloite Touche.
2. Moody’s, Fitch, and Standard & Poors control the rating process in the US.
Isn’t this worth an anti-trust glance or two or three?
Is the output from these companies valid in any way if we don’t have access to their methods?