• Triple A!


    Ratings Agencies Back To Their Old Tricks, Ratings Agency Says

    Moody’s, S&P and Fitch took a lot of flak for being a little too optimistic about the creditworthiness of derivatives before those derivatives proved anything but creditworthy. S&P got sued over it, but there may have been other motivations for that, and the other two, as well as the industry as a whole, more or […]

    / Jan 30, 2015 at 4:00 PM
  • 110810_moodys_ap_605


    New-In-Town Rating Agency Would Appreciate It If Moody’s Didn’t Piss On Its Leg, Claim That It’s Raining

    Moody’s Corp. doesn’t often give away its thoughts free of charge. But the ratings firm made an exception recently, issuing an unsolicited credit rating to National Penn Bancshares Inc., a small community bank it had never assessed before. Moody’s grade was lower than one issued just weeks earlier by Kroll Bond Rating Agency Inc., which […]

    / Nov 14, 2014 at 9:45 AM
  • News

    Fitch, Moody’s Still More Patriotic Than S&P

    Neither are going to make that double-A-plus mistake that a certain ratings agency made, and while they’re at it, they have some kisses to blow in Washington’s direction.

    / Sep 22, 2014 at 5:55 PM
  • News

    (Technical) Default Watch ’14: Argentina

    Today’s the big day for the uniquely recalcitrant debtor’s second big D in 13 years, now that its least favorite jurist has reiterated once again that, its best efforts not withstanding, it isn’t allowed to pay only the creditors it wants to pay while piously promising to “meet its obligations, pay off its debts and honor […]

    / Jun 30, 2014 at 5:22 PM
  • News

    Citi Mexico Not Quite As Creditworthy As It Was Four Months Ago

    Even a ratings agency can see that a $400 million loss, some impending arrests and Mike Corbat’s heartache are not good for business.

    / Jun 4, 2014 at 11:20 AM
  • News

    Moody’s: Terrible Corporate Governance May Be Less Terrible Than An Activist Hedge Fund

    Let’s say, for argument’s sake, that you are a member of a long-entrenched board of directors. Perhaps at a company that has been run (ineptly, perhaps) exclusively for the benefit of its ruling family. Then, disaster strikes, and someone—perhaps Carl Icahn, or Dan Loeb, or someone who used to work for Carl Icahn or Dan […]

    / Mar 11, 2014 at 3:32 PM
  • jimmycayne (2)


    Fitch, Moody’s, S&P Were Quite Obviously Pulling A Jimmy Cayne For Most Of The Years Leading Up To The Financial Crisis, Allege Bear Stearns Hedge Fund Liquidators

    The liquidators want $1 billion for investors and the name of the rating agencies’ dealer for a friend.

    / Nov 11, 2013 at 4:47 PM
  • This cow seems cool.


    Too Big To Fail Is Pretty Much Over, Says Moody’s

    Yesterday Moody’s put the debt of four of the six big U.S. banks – GS, JPM, MS, and WFC – on review for downgrade, and the other two – C and BAC – on the amusing “review direction uncertain,”1 because Moody’s is becoming increasingly convinced that, if those banks blew up, the government would not […]

    / Aug 23, 2013 at 4:04 PM
  • There are a lot of sort of non-numeric charts in this report but I like 'em; this chart works.


    Insurance Companies Were Bad At Predicting How Dumb Their Customers Would Be

    Retail clients are not typically paragons of rationality or possessors of Black-Scholes calculators so a good way to make money is to bamboozle them with mispriced derivatives. The classic way banks do this is with structured notes, where you combine a bond worth $75 and an S&P option or whatever worth $15 and sell the […]

    / Jun 25, 2013 at 2:14 PM
  • Get ratings right? Hmm. I hadn't thought of that.


    Congressmen Have Some Advice For Ratings Agencies

    The ideal financial regulatory regime would go like this: Regulators would tell market participants not to screw up. Market participants would not screw up. Peace and harmony would reign throughout the land. This is ideal not only because of the peace and harmony but also because it omits any work by the regulators. Why choose […]

    / Jun 21, 2013 at 5:01 PM
  • Oh hey cow.


    Fitch And Kroll Are Happy To Make Mortgage Securitization Fun Again

    Bloomberg has a delightful story today about a new JPMorgan RMBS transaction, its first non-agency deal since the crisis. Specifically about this: The bonds are made riskier by the New York-based bank and other originators of the mortgages offering weaker promises to repurchase misrepresented loans than those on similar deals, Fitch Ratings said today in […]

    / Mar 20, 2013 at 7:24 PM
  • News

    Ratings Agency Would Prefer Not to Be Sued, Won’t Cut U.S. Debt Rating

    Fitch Ratings does not want to find itself in S&P’s shoes.

    / Feb 27, 2013 at 3:12 PM
  • This is gonna be a go-to cow for a while


    Moody’s Not On Board With Making Mortgage Securitization Fun Again

    A primary goal of financial engineering is to confuse the bejeezus out of Them while remaining crystal clear to Us. There’s no point to it if it doesn’t in some way confound the expectations of some Other, whether that Other is the tax authorities, bank capital regulators, rating agencies, customers, or markets generally.1 But the […]

    / Feb 25, 2013 at 6:41 PM
  • umm, what?


    Some S&P Analysts Weren’t Happy With S&P’s Whole “Trying To Rate Deals” Thing

    Michael Lewis had this to say yesterday about Greg Smith’s criticisms of Goldman Sachs:1 None of this exactly came as news. The news was that a living, breathing Goldman employee had said it. There was also, between the lines, a fresh hope: Goldman had employed an idealist! For a decade! That was pretty much my […]

    / Feb 5, 2013 at 12:54 PM
  • Richard Handler


    Moody’s Attempts To Ruin Dick Handler’s Good Time

    Until recently, being chief executive officer of Jefferies was an exercise in getting shit on. As the man in charge for the last 13 years, Richard Handler has had to put up with a lot of hurtful remarks that, while nothing to the person tossing them off, undoubtedly stung quite badly. “Third-tier bank.” Place “I wouldn’t let my maid’s kid work.” “Poor man’s Morgan Keegan.” So you can imagine that after a string of victories over the last several months that included getting involved in the slaughterhouse business and paying all-cash bonuses unlike some people, Handler and Co. would be feeling pretty good about themselves and that after announcing to the world they were getting paid more this year than their counterparts at big kid banks, they’d be feeling REALLY good about themselves. That payday, however, did not go over well when input into Moody’s proprietary just-make-it-up credit-rating model, and now Handler’s plan to gather everyone up to watch as the board shoots his compensation out of a tee-shirt gun in hundred dollar bills is completely ruined.

    / Feb 4, 2013 at 2:25 PM
  • cows, possibly European


    EFSF Conveniently Downgraded

    Here are two tiny little puzzles about Moody’s’s’s downgrade of the European Financial Stability Facility from Aaa to Aa1 just now. But first, here is some math on EFSF guarantees; basically every €100 of EFSF bonds has €165 of member guarantees, of which €103ish were Aaa-rated and €62ish were not. Until Moody’s downgraded France last […]

    / Nov 30, 2012 at 6:17 PM
  • Cows, how I have missed you


    Even Ratings Agencies Are Unimpressed By Ratings Agencies

    There are many great businesses in the world but surely none is as great as being paid money not to do stuff. I was in that line of work for two glorious months in the summer of 2011 and I’m pretty sure it was the peak of my career. Counterintuitively this business is not always […]

    / Oct 10, 2012 at 7:19 PM
  • News

    Moody’s Is Pretty Sure Greece Won’t Leave The Eurozone

    They’re gonna downgrade their outlook from stable to negative though, just in case. [WSJ]

    / Jul 23, 2012 at 6:30 PM
  • Why hello there cow.

    Banks, News

    Moody’s Slightly Reduces Overrating Of Banks

    Are we supposed to care about these downgrades? I like Glenn Schorr at Nomura, emphasis mine: We think the net financial impact of these downgrades will be manageable as 1) potential collateral calls are small percentages of these firms’ liquidity pools; 2) counterparties have been preparing for this for some time and ratings downgrades have […]

    / Jun 22, 2012 at 10:03 AM
  • News

    Moody’s: Banks Do Things That Are Bad And Good And Bad For Them

    Moody’s Investors Service downgraded the debt ratings of 15 major international banks and securities firms on Thursday, a move that could cost the banks billions of dollars in extra collateral…U.S banks that were downgraded included: Bank of America, Citigroup, Goldman Sachs, JPMorgan, and Morgan Stanley. “All of the banks affected by today’s actions have significant […]

    / Jun 21, 2012 at 5:54 PM
  • News

    Moody’s Treads Where No Other Rating Agency Dare

    “Moody’s Investors Service downgraded six European nations and became the first ratings firm to warn the U.K.’s rating could be at risk, citing the area’s weakening ability to implement measures aimed at reducing debt…Where Moody’s did deviate from recent actions by other ratings firms was in changing the outlook for the U.K. There had been […]

    / Feb 13, 2012 at 8:03 PM
  • News

    Moody’s May Downgrade Penn State

    On account of recent events.

    / Nov 11, 2011 at 5:17 PM
  • Banks

    Could Moody’s Saying BofA Is Not Too Big To Fail Make BofA Not Too Big To Fail?

    Michael Feroli at JPMorgan had an interesting note this morning (via ZH) on the Republican letter to Bernanke, pointing out that this sort of saber-rattling against easing might actually make it more likely as a way for the Fed to assert its independence. Moody’s downgrade of BAC/WFC/C, on the other hand, may have the opposite […]

    / Sep 21, 2011 at 2:39 PM
  • Rating Agencies

    Don’t Ask To Speak With Brian Moynihan Today

    He may be in a mood.

    / Sep 21, 2011 at 12:39 PM
  • News

    Moody’s Puts 5 States On Notice

    Apparently Maryland, South Carolina, New Mexico, Tennessee and Virginia should be preemptively quaking in their boots.

    / Jul 19, 2011 at 2:51 PM
  • News

    Credit Ratings Agencies May Want to Tread Carefully

    It turns out that when you say things like “let’s not pay back our debts, what’s the worst thing that can happen?,” one thing that does happen is that the credit ratings agencies start worrying that you might not pay back your debts. Weird. From Reuters: Standard & Poor’s has warned lawmakers privately that it […]

    / Jul 14, 2011 at 1:49 PM
  • News

    Moody’s Is Both Disappointed In, Impressed By Washington

    Although Moody’s fully expected political wrangling prior to an increase in the statutory debt limit, the degree of entrenchment into conflicting positions has exceeded expectations. The heightened polarization over the debt limit has increased the odds of a short-lived default. If this situation remains unchanged in coming weeks, Moody’s will place the rating under review. […]

    / Jun 2, 2011 at 5:19 PM
  • News

    Moody’s (Tentatively) Likes What It Hears About These Budget Discussions

    The U.S. is the only large AAA-rated country that saw its debt rise during the crisis that until recently had no plan that would reverse the trend, said Steven Hess, senior credit officer at Moody’s. Budget cuts would mean the U.S. wouldn’t likely sell as much debt, which has grown to $9.13 trillion in marketable […]

    / Apr 13, 2011 at 5:52 PM

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