Lars77
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Fri Jul-15-11 05:00 AM
Original message |
Europe anger over US credit rating 'oligopoly' |
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Run time: 01:59
https://www.youtube.com/watch?v=wjv0pyz0M_0
Posted on YouTube: July 15, 2011
By YouTube Member: AlJazeeraEnglish
Views on YouTube: 301
Posted on DU: July 15, 2011
By DU Member: Lars77
Views on DU: 1050 |
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PoliticAverse
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Fri Jul-15-11 05:23 AM
Response to Original message |
1. The problem isn't 'profit' vs 'non-profit' concerning the rating agencies... |
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the problem is what is the source of their income.
If you are paid by the people that produce the security you have a great incentive to give a good rating to that security. That was the mortgage problem. The agencies were paid by the companies that produced the products and so had great incentive to give the products high ratings.
Even a non-profit rating agency that received all their income from the creators of the securities they were rating would have incentive to inflate ratings.
The more the agencies are paid by groups that are concerned with the accuracy of the ratings the more accurate the ratings will tend to be.
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summerschild
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Fri Jul-15-11 12:07 PM
Response to Reply #1 |
3. It's certainly true the structure is an incentive for untruthful ratings |
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but I think what happened and how long it lasted (may still be going on) belies a collusion between Wall Street and the ratings agencies. Both were pursuing profit by any means and they all knew it. The "wink/wink" between them was a sham - they all knew it was deceitful and dishonest and colluded for their mutual profit.
I've grown increasingly skeptical and struggle to rationally evaluate facts and not become paranoid in the process. The "shock doctrine" has worked too many times to the detriment of many and the benefit of few. 9/11 provoked sufficient fear (crisis) to hand over basic freedoms and our economic fall (crisis) is providing opportunities to take even more from ordinary working people.
The debt ceiling crisis is a manufactured crisis, manufactured (IMHO) by the Republicans for political gain. The consequences of default, however, are too real. Likewise, the deficit is a cause for concern and strong reasoned action - but it has been seized as a political tool - not to improve the economy or create jobs, but with the goal of keeping the economy down to regain power.
I am sitting here hoping the raters are honest and trying to be helpful in Europe and in the US. But their exposed unholy Wall Street alliance in fraud gives me pause. Many mysteries in life can be solved by the rule: always 'follow the money'. I've read about the hedge funds (like Cantor's recently publicized) betting on US bonds falling and about predator investors swooping in to scoop up debts of bankrupt nations. Can anyone tell me who will profit if the U.S. and other countries go bankrupt?
Thanks for any insight or resources!
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xchrom
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Fri Jul-15-11 06:00 AM
Response to Original message |
2. nadin baba. best name ever. nt |
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Edited on Fri Jul-15-11 06:00 AM by xchrom
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Sat May 04th 2024, 05:56 AM
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