Pity the Poor, Misunderstood Rating Agencies

Pity the Poor, Misunderstood Rating Agencies

http://www.wallstreetsux.com/blog/

Posted on May 24, 2010 by David
We ask little, really of our independent rating agencies beyond honesty.They are not perfect, none of us are, and it’s opinion, after all, that they peddle, so if they are wrong about a company or a stock or security once in a while, well, what the hell, it is what is it. As long as they are being honest with us . . . which, of course, THEY ARE NOT!

Think of the big three financial sector rating agencies, Moody’s, Standard & Poors and Fitch and imagine how they got so big, how they get to cozy up with the boys on The Street. By rating bonds? Come on, no one pays that kind of money for basic research like this. The fact is that the rating clowns make a bundle when they give a good rating to a security thier pals on the street are pushing. Plus they don’t want to hinder their ability to get other biz from the big banks clamoring for A1 Ratings on all their crap. So, when they were shown buckets of dubious financial tools, they basically took the banks’ words for it and pronounced them all AAA rated, even those mortgage backed securities that we all watched drop to nothing,

And, now listen, they not only pronounced these as good as gold while things were not quite too bad, they went on and on and on to keep that rating even as the entire world watched them flow down the tubes, thus convincing more and more folks to pony up the cash only to see it fly down that toilet rat hole called Wall Street. Even now, after showing their cards already when the big bust first went down, they still can’t help themselves when it comes to greed. A few clowns at Moody’s accidently rated some European derivatives (derivatives being, in a nutshell . . . incomprehensible investment tools that benefit ABOSOLUTELY no one except the Wall Street banks who create and sell them) even though they knew that the high rating occured because of a computer glitch! I mean, come on, fix the friggin’ computer, put the rating where it should be and let’s move on . . . but no, these guys just cannot help themselves.
And who is trying to come to the rescue, although, as a senator we have to be leery, but Al Franken, Senator from Minnesota, true blue democrat/liberal and former Saturday Night Live writer. Al is actually at least going through the motions of trying to make these rating agencies honestly rate things, which is really all we want them to do (and what they find harder and harder to stick with). Al is proposing an amendment that will create a Credit Rating Agency Board, essentially a commitee that would make issuers of a particular kind of security use a certain rating agency with which THERE IS NOT A CLOSE TIE. In other words, the banks can’t just go to Bob up the block and say “gimme AAA1 or we stop writing you checks”. The banks will have a rating agency selected for them, one that might just actually read all the crap out there and decide something like “shit, no, this stuff is garbage, sorry bank.” In fact, what this legislation may do is level the playing field for the hundreds of honest, hardworking, smart rating agencies that are simply left out of the large equation by the big banks who have no relationship with them and, therefore, don’t want to play with them as they just might be honest.

We here at Wallstreetsux.com are with you, Al. You may not have always made us laugh, and you are, after all, now part of the government, but we hope you’re honest and able to make some changes before they chew you up and spit you out.

It’s absurd, it’s crazy, it’s so obviously lousy from the ground up that it’s amazing it just goes on and on and on and the banks and rating agencies begin to wonder whether they are trusted. But they just keep pulling shenanigan after shenanigan (might be the first time I ever wrote that word down, kind of fun, you should try it some time) and flushing our money down their toilets . . . sucking it up at the end, getting fatter and fatter and more and more bloated like a landfill piled high with shitty diapers and bags of dog crap that will stink and smell for decades.

Wall Street Sux, folks, they change the paradigm, they control the gov’t, they lie, they mislead, they steal under the guise of profit and they’ll eat us all alive if we don’t do something. Make a statement, buy a magnet, buy a tee shirt, show them what you think.