Posts filed under “Analysts”
Our chart of the day comes to us today via Bloomberg, looking at YTD performance of McGraw-Hill (parent co of S&P), Moody’s, and the S&P500 Index.
David Wilson observes:
“McGraw-Hill and Moody’s face two threats because S&P cut the U.S. government to AA+, Appert wrote yesterday in a report. The first is greater regulatory scrutiny of the rating industry, which has been criticized for flawed assessments of mortgage-backed securities during the past decade’s housing bubble.
“The perception in Washington that the rating agencies have too much power and must be ‘reined in’ will undoubtedly by reinforced by S&P’s decision,” he wrote.
The second risk is that bond sales may become more volatile as the lower rating helps slow economic growth, the report said. Assuming that occurs, revenue and earnings at McGraw-Hill and Moody’s would become less predictable as well.
As the chart above shows, the index has outperformed the two public rating agencies . . .
McGraw-Hill, Moody’s Risks Rise After S&P Cut: Chart of the Day
Bloomberg, August 09, 2011
Here is Brown Brothers Harriman on the S&P downgrade: “With the US downgrade now out of the way, we think market attention will swing back to other DM countries that are facing downward pressure on ratings too. Here is a summary of our most recent ratings outlooks for DM. Our model has the US as…Read More
Dan Alpert is a founding Managing Partner of Westwood Capital. He has more than 30 years of international merchant banking and investment banking experience, including a wide variety of work-out and bankruptcy related restructuring experience. Dan’s experience in providing financial advisory services and structured finance execution has extended Westwood’s reach beyond the U.S. domestic corporate…Read More
S&P Downgrade of US Creditworthiness: Some Initial Thoughts August 7, 2011 Don Rissmiller, Strategas – Weekly Economics Summary 7 August 2011 ~~~ S&P’s logic: “On Aug. 5, 2011, Standard & Poor’s Ratings Services lowered its long-term sovereign credit rating on the United States of America to ‘AA+’ from ‘AAA’. The outlook on the long-term rating…Read More
Paul Brodsky & Lee Quaintance run QB Partners, a private macro-oriented investment fund based in New York. ~~~ Takeaway: We believe the downgrade of US Treasury obligations is legitimate and, in one very relevant way, insufficient. First, the nominal creditworthiness of Treasury obligations is solely a function of controlling the printing press. Congress ultimately retains…Read More
The downgrade from TripleAAA to AA+ by Standard & Poors raises many questions. Here is my list of most important issues the downgrade raises: 1. The change in trajectory of US debt was in service of Banks: It began with TARP, and continued with every other bailout/stimulus/economic plan. What was S&P’s role in creating that…Read More
Here is the great irony: S&P (and the rest of the ratings agencies) helped contribute in no small way to the overall economic crisis. The toadies rated junk securitized mortgage backed paper AAA because they were paid to do so by banks. They are utterly corrupt, and should have received the corporate death penalty (ala…Read More
I think it’s likely that I introduced Bob Farrell’s Market Rules to Remember to the blogosphere (albeit to a smaller audience), as they’d been an integral part of my upbringing in the business and I was eager to share them when I started blogging. (BR posted them here in August 2008.) That said, let’s have…Read More