S&P: You’re Welcome!


The Big Picture

Jim Morin on the S&P downgrade:

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via S&P: You’re Welcome!.

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3 responses to “S&P: You’re Welcome!

  1. Ah, the agencies… they are just making money. Selling AAA’s for a buck. The junk stuff was never incompetence on their part, just making profits.

    And they enjoy some sort of semi-public authority, even as they toy with nationstates and act as gatekeepers to pension funds. Not sure where the money in lowering outlook lies though.. maybe someone shorting the bonds or the dollar?

  2. I think this really started in the 80s when they became publicly traded companies. That created a demand for increased profits which pushed aside their independence, which they had guarded in the past. Of course the derivatives they rated were so complex that incompetence was probably part of the problem. The people who work for ratings agencies often were ones who couldn’t get jobs at the big financial institutions.

  3. Good point. And the mix of demand for profits and growing power was always troublesome. Same goes for lack of transparency.

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