new credit threat to banks, page-26

One of the fist regulatory reforms they make is to outlaw ratings agencies, if folks had had to do the hard work and investigate things themselves they would have never taken on these forms of debts in the first place. Something gets rated Aaa and folks dont look any further, if folks understood how how ridiculously idiotic the ratings agencies methods were they would demanding the be disbanded.


The whole concept of having an organization rate the likelihood of default is flawed. , How could a single company understand the nuances of hundreds of industries, plus understand the country , the economy the future potential market, the correlation with other industries etc etc etc

The whole system is built on self dealing and self interest. The ratings agencies were paid by investment banks to raise the credit ratings of securities by finding holes in the ratings agencies formula's. The investment banks would go if we slice and dice these debts would you give it this rating, No? ok what if we do this and hired you to rate them do you think you would give them a Aaa?

When a bank outsources risk assessment they are admitting complete incompetence.

They should be stopped at the airport and sent back home on the plane. :)