economistsview.typepad.com - 12/11/2008
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Ratings agencies are supposed to solve market failures, not create them. The market failure arises because in most cases it's prohibitively costly for individual investors to collect and analyze the information they need to make informed judgments about the quality of the assets they are ...
dealbook.blogs.nytimes.com - 12/5/2008
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dealbook.blogs.nytimes.com —
Junk bond peddlers should have taken a vacation
in November. That’s because there were no — count...
‘em, zero — high-yield corporate bond deals done last month on the entire planet, according to data from Thomson Reuters. That is ...
(more)
High Anxiety About High Yield
ritholtz.com - 12/7/2008
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ritholtz.com —
“These errors make us look either incompetent at
credit analysis or like we sold our soul to...
the devil for revenue, or a little bit of both.” — A Moody’s managing director responding anonymously to an internal management survey, September 2007. ...
(more)
Blaming Moody’s
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Mark Thoma raises the key question . . .
Newmark's Door —
. . . now we just need to answer it.
But when agency relationships are broken, i.e. when the profit motive of the ratings agencies provides incentives that are not fully compatible with the best interests of investors who purchase the securities, and when the interests of the ratings agencies instead become aligned with the firms issuing issuing the securities they are rating, problems are bound to develop . . .
What broke the agency relationships? As regular readers of this blog know, I think Mike "Mish" Shedlock has ...
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