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Honest Rating Agency Is Punished for Telling the Truth
Posted By Washingtons Blog On January 24, 2013 @ 1:30 am In Analysts,Bailouts,Credit,Think Tank | Comments Disabled
The big 3 government backed ratings agencies (technically known as Nationally Recognized Statistical Rating Organization ) – S&P, Moody’s and Fitch – all committed massive fraud, which was a prime cause  of the 2008 economic crash.
On the other hand, government-backed rating agency Egan-Jones has consistently been more honest and forthright in its ratings of countries and corporations, and more aggressive than Moody’s or S&P in downgrading U.S. credit  (and see this ).
So guess which rating agency just got stripped for a year and a half of its government-backed rating agency status?
Yup … Egan-Jones .
Given that the government’s whole strategy in dealing with the financial crisis is to cover up the fraud  (the “financial reform” legislation didn’t do anything much  to reform rating agency shenanigans), honesty cannot go unpunished .
Postscript: It is possible that Egan-Jones did something wrong. But given that the main business model of S&P, Moody’s and Fitch is fraud – and Egan-Jones is in general much more objective and honest – it is clear that Egan-Jones was singled out and punished because of its cynicism as to the creditworthiness of the U.S. and its favored sons, such as the big banks.
Article printed from The Big Picture: http://www.ritholtz.com/blog
URL to article: http://www.ritholtz.com/blog/2013/01/honest-rating-agency-is-punished-for-telling-the-truth/
URLs in this post:
 Nationally Recognized Statistical Rating Organization: http://en.wikipedia.org/wiki/Nationally_recognized_statistical_rating_organization
 committed massive fraud, which was a prime cause: http://www.washingtonsblog.com/2009/08/companies-auditors-rating-agencies-and-regulators-all-committed-fraud-which-helped-blow-the-bubble-and-sowed-the-seeds-of-the-inevitable-crash.html
 took bribes: http://www.washingtonsblog.com/2009/09/credit-rating-agencies-took-bribes-for-higher-ratings.html
 sold their soul: http://www.washingtonsblog.com/2008/10/ratings-agencies-sold-their-soul-joining-wall-street-and-the-government.html
 culture of covering up improper ratings: http://www.washingtonsblog.com/2009/09/senior-moodys-executives-theres-a-culture-of-covering-up-improper-ratings.html
 anyone who believed them was an idiot: http://www.washingtonsblog.com/2009/03/moodys-anyone-who-believed-us-is-an-idiot.html
 this: http://www.washingtonsblog.com/2011/01/financial-crisis-inquiry-commission-slams-greenspan-bernanke-geithner-paulson-summers-sec-rating-agencies-and-big-banks-for-causing-crisis.html
 played games: http://www.washingtonsblog.com/2009/02/moodys-plays-games-to-avoid-stripping-the-u-s-uk-ireland-and-spain-of-their-aaa-ratings.html
 so the government scratched their back: http://www.washingtonsblog.com/2008/12/is-uncle-sam-blackmailing-the-credit-rating-agencies.html
 more aggressive than Moody’s or S&P in downgrading U.S. credit: http://www.washingtonsblog.com/2011/07/american-government-endorsed-rating-agency-downgrades-u-s-credit.html
 this: http://www.zerohedge.com/news/egan-jones-downgrades-us-aa-aa
 Egan-Jones: https://www.sec.gov/news/press/2013/2013-7.htm
 government’s whole strategy in dealing with the financial crisis is to cover up the fraud: http://www.washingtonsblog.com/2010/11/fraud-started-at-very-top-with.html
 didn’t do anything much: http://www.washingtonsblog.com/2009/11/senator-dodds-bill-trying-to-prop-up-a-broken-system.html
 cannot go unpunished: http://www.washingtonsblog.com/2012/04/obama-has-prosecuted-more-whistleblowers-than-all-other-presidents-combined.html
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