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Reads of the Day for the start of 2009
Angry Bear — All (somewhat***) via Mark Thoma: Thomas Frank in the WSJ tells me why I always disagree with Robert (and the Other Economists) on the role of rating agencies: And who makes sure that Moody's and its competitors downgrade what deserves to be downgraded? In 1999 the obvious answer would have been: the market, with its fantastic self-regulating powers. If you look at the spreads of various debt products, you can see that the market was doing that type of job even in 2007. For instance, the debt market priced ["rated"] Bear ...