Jake On The Rating Agencies
Another great review from Jake Zamansky on the role of the ratings agencies in the subprime crisis.
Investors: Beware any time a market player has a government protected, exclusive franchise to print money.
My take on this from the perspective of the Big 4 later coming later today.
Ordinarily we would just let market forces deal with such failure. However firms like Moody’s, Standard & Poors, and Fitch are granted special competitive advantages because they are part of a select group of eight companies designated as Nationally Recognized Statistical Rating Organization (or “NRSRO”). Based on their record, the government should not be protecting them.
You sound just like me, “Beware ….” Consider what that implies for Helicopter Ben and the Feds.