ratings agencies

Last week, Reps. more »

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Alan Grayson's e-mail on Moody's warning that it might reduce the US's AAA rating, suggested that Moody's was either threatening a downgrade because it wants to get the Bush tax cuts for the rich extended, or, alternatively, that “Moody's is living in what Aristophanes called "Cloud Cuckoo Land."” He says this because Moody's is upset about the possibility that the US may go over the so-called more »

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(Reposted from May of last year to commemorate the S&P "downgrade." The "agency" scams have since spent millions in lobbying money to weaken and delay the Franken Amendment and other urgently needed reforms.)

PowerPoints, emails, and transcripts obtained by Sen. Carl Levin's Permanent Subcommittee on Investigations illustrate the real magnitude of Sen. Al Franken's victory today. Sen. Franken was able to pass an amendment which eliminates the conflict of interest that's created when ratings agencies "compete for business." It passed the Senate in a 64/35 vote - and it was a bipartisan victory, no less, with 10 Republicans joining 54 Dems to support it.

Here's how broken our current system has become: Not only are the ratings agencies competing as for-profit businesses, but our two largest agencies are publicly traded companies. more »

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The American people have just endured a months-long bipartisan battering with words, as politicians and talking heads from both parties insist that they "take their medicine" by enduring severe austerity cuts. Against all evidence, they were told that this would be good for the economy. This illogical argument only has credence because Washington's filled with followers of a free-market religion whose deity is the Market, whose Oracle is the stock exchange, and whose clergy includes bishops named Greenspan, Geithner, Rubin, and Rivlin.

But if Democrats are true believers, Republicans are this religion's fundamentalists. All they need to do is repeat the sacred phrase "Tax cuts produce jobs!" and the whole congregation forms into ranks, prepared to do battle.

Believers in the One True Market believe that their Deity can only be propitiated when they sacrifice the sick, the elderly, and the poor. This lowers government expenditure and reduces political pressure to make the rich and powerful pay their fair share. We're told that this sort of sacrifice reassures the wealthy. These minor deities will then invest and create new jobs, which is why they're given the ritual title of "Job Creator" or "Wealth Creator."

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THE S&P REPORT: FROM DUE DILIGENCE TO DUE DEFERENCE

May 1, 2011

Dear Citizens and Elected Officials:

Introduction
On Monday, April 18th, Standard and Poor’s, Inc., a ratings firm, lowered the outlook on the United States’ credit standing to “negative” from “stable,” without lowering our AAA/A-1+ rating, the highest possible, which we share with the U.K., France, Germany, more »

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People are debating the need for a "systemic fix"to address the foreclosure crisis. What we really need is a systemic redesign, from the ground up. Fortunately, the design was laid down centuries ago - by 800 years of law, and by the idea that free people are entitled to limit the unwarranted power of others over their persons and property. These principles are a good foundation for structuring future negotiation, legislation, or regulation.

The President wooed corporate executives this week with a Wall Street Journal editorial called "Toward a 21st Century Regulatory System." What we really need is a 21st century banking system, built on ancient principles and not fly-by-night profiteering.

You could encode those principles in a document and call it the Borrower's Bill of Rights. You could even call it the Mortgage Magna Carta, since some of the basic principles involved date back that far. more »

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President Obama's Department of Justice announced last week that there would be no indictments in the collapse of AIG, an event which led to a worldwide economic collapse and cost the American taxpayer trillions. As someone who once worked for AIG I was shocked, but apparently that's how this mystery ends: Hundreds of millions of victims, smoking guns in every room, and not a perp to be found anywhere.

Yves Smith is disappointed that PriceWaterhouseCoopers, the auditors who signed off on AIG's financial claims despite mounds of disturbing evidence, escaped serious legal scrutiny. She observes that our "Potemkin" financial reform (her word) won't remove the barriers that prosecutors face in pursuing secondary parties like auditors (although I believe the Supreme Court ruling she cited only addressed civil suits.) Not only is the auditor protected, but that allows the fraudster himself to use the defense that he kept his auditor informed - kind of like Bush and Cheney using John Yoo's legal opinion to inoculate themselves from criminal prosecution.

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