SEC’s Shapiro: Ratings Agencies Need Supervision
Encouraging comments from SEC chair Mary Schapiro:
“The Securities and Exchange Commission has created a new group of examiners to oversee credit rating agencies, which came under sharp criticism for their role during the financial crisis.
The SEC has already adopted a number of measures to increase transparency at credit rating agencies, which are paid by the issuers they rate. But greater oversight is needed with officials expected to conduct both routine and special examinations of their activities, Ms Schapiro is set to tell a Congressional oversight hearing on Tuesday.
The plan is part of a wide range of structural changes being made at the SEC, which has faced withering criticism in the past year for its oversight of financial firms and ratings agencies as well as for failing to detect the Bernard Madoff fraud in spite of credible allegations brought to it for at least a decade.”
Now, we need to open the Ratings Agencies up to competition, and eliminate their special SEC status.
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Source:
SEC to create group to check rating agencies
Joanna Chung
FT, July 13 2009
http://www.ft.com/cms/s/0/ea7d1208-6ff6-11de-b835-00144feabdc0.html
July 14th, 2009 at 11:51 am
Whatever it is, it doesn’t seem right. In free market capitalism, these tremendous profits would draw competition to bring them back in line. The system is broken and once again, you have TBTF…and it only took a few months after the last TBTF crises.
July 14th, 2009 at 12:11 pm
So the beauty of the Goldman model…take massive risks compared to the other banks…if we fail, the taxpayer will bail us out. So Goldman gets all the reward and the taxpayer gets all the risk.
This is the greatest model ever devised….for Goldman.
July 14th, 2009 at 1:05 pm
Can we also stop the government from blindly using these ratings by requiring the AAA rating? … but how can we prevent some other metric becoming a defacto government guarantee?
July 14th, 2009 at 2:12 pm
SB, any updates on your overall thesis and QID holdings? I”m adding QID at the moment, but the way some of these ETFs behave, I’m not sure what the ultimate upside is. Any thoughts?
July 14th, 2009 at 2:27 pm
My thought is should have sold at 90 and bought back at 31 LOL…my long term holding of QID has still strongly beaten the market…and I still see upside as the market and economy are complete jokes.
July 14th, 2009 at 2:31 pm
while it sounds good. its only as good as the regulators. which as we have seen can fail miserably. maybe they need to be forced to grade the rating agencies and based on how well they did that job, they either get to keep their special status or not. and we do definitely need to add some new ones. or add a government owned one to keep them honest (if that even possible!!!!!!)
July 14th, 2009 at 2:40 pm
E-
QID has been a bit of a dog- in that the range has been about 31 on the low side and 34 or so on the high side for about 3 months
maybe its due for a breakout though- NAZ has been doing better than the other indexes- but I see no reason why tech will tread water when the economy will most likely remain weak for an extended period of time and everyone has priced in a recovery that will probably never materialize-
if you are a real candlestick watcher maybe you could play it on the bottom of the range for a short trade
July 14th, 2009 at 3:54 pm
“Now, we need to open the Ratings Agencies up to competition, and eliminate their special SEC status.”
Exactly. I can get on this bandwagon…
July 14th, 2009 at 4:27 pm
Won’t mean much if they don’t hire Markopoulos to run it.
July 14th, 2009 at 5:09 pm
And wghile we’re at it, we also need an agency to oversee the SEC. Make it so
July 14th, 2009 at 8:22 pm
Isn’t it obvious to all that there is an inherent conflict of interests in the present system? Why then, don’t we seem able to move on to the serious debate about how to revise the model? The lobbyists must be making out like bandits?
July 14th, 2009 at 11:23 pm
@Lugnut
and to identify myself…
I’m the guy…behind the guy…behind the guy…