A billionaire explains the middle class

Hi, George.

Thanks for reply> >

Ah. So *I* could start a blog that assigned ratings to securities. It might be completely ignored, and, even if it was read and my ratings accepted as having some semblance of accuracy by assorted parties, my ratings wouldn't automatically qualify as "U.S. Gummint-Recognized Rating"... but I could do it.

( The financial industry will, no doubt, rest easier on learning that I have no intention of doing this. )

Okay. "Nationally Recognized Statistical Rating Organization". ( Wonder what the "Non-Statistical Rating Organizations" use... "but that, O Best Beloved, is another story." )

Something like "The McKenney Financial Assessment Blog ratings do not appear to be so far out of line as to force us to take you to court if you use them to puff up your product"?

Let's see...

(2) Do I look like I can be easily bribed or intimidated? (3) Can my analysts add and subtract without excessive supervision? (4) Am I already bought? (5) Do my rating methods involve dowsing, witchcraft, or human sacrifice? (6) Can my staff and I be trusted to keep our mouths shut?

Seems reasonable. ( "The SEC is visiting today; get that pentacle cleaned up!" )

Were... ? Sorry -- I think I lost a predicate here or something. "Were given an AAA rating", perhaps?

Wait a minute. If the NRSROs don't have to reveal their methods, how can the SEC say that its "No Action Letter" has evaluated these unrevealed methods? ( Is the *SEC* using witchcraft? )

But, since it's a "non-NRSRO" -- assuming I've got this right -- then companies can't publicly use that company's ratings to sell their products. I'd guess that they could supply two figures -- Moody's rating

Is there another approach to this, one that wouldn't involve hours of televised Committee meetings where ratings agencies moan and sob that revealing the truth to the SEC would destroy the entire financial industry?

Frank

You wonder how much these investment banks (and others) can blame their ina ppropriateness on hackers and malware: ========================= ==============

JPMorgan Data Breach Entry Point Identified: NYT

is year could have been avoided if the bank had installed a simple security fix to an overlooked server in its network, the New York Times reported, c iting people briefed on investigations.

--

Indeed, much too fast on the send button after spell check. "were in default" should have been included.

IMNSHO: Not only bonds, but everything rated should be included in [separate] league tables, e. g. CDOs. While default is objective and definite, perhaps 5/10/life of bonds table showing not only default but changes in ratings, both up and down, would be helpful. Data to construct the tables should be available, but where? Would a simple count be informative, or should the result be dollar weighted?

top posted

This just in.

While the Commercial Mortgage Backed Collateralized Debt Obligations [CMBCDO] are a minor segment of the continuing ratings scam, at least some action was taken.

securities in the biggest piece of the commercial-mortgage bond market in a $60 million settlement with the U.S. Securities and Exchange Commission, according to a person with knowledge of the matter.

The deal, which the person said may be announced as soon as

major credit rater. The SEC, which has been examining whether the credit rater bent criteria to win business in

On the other hand, China used to hold about third of the world's wealth in 1820, so they may simply be on track to regain their historical position:

That's an amazing chart! A power chart spanning nearly 200 years...

It is not the wealth, it is GDP.

A very interesting chart, indeed, thanks for posting.