ratings agencies

  • News

    You Now Have Two Ways To Evaluate Mortgage-Backed Securities

    You can do the work yourself, what with all of the new information banks will have to disclose about all of the garbage they’re hiding in them. Or you can trust that the ratings agencies will live up to the spirit of the new rule directing them to do what they say they do, rather […]

    / Aug 29, 2014 at 12:13 PM
  • Workin' hard-ish to prevent another one of these.

    News

    Regulators May Finally Get Around To Dealing With The Things That Almost Destroyed The World Economy A Few Years Back

    We all know that no one listens to what credit ratings agencies say, and that if you were buying up all of that RMBS eight years ago marveling at what a great deal you were getting on triple-A rated stuff, you had it coming. But wouldn’t it be neat if you could put the tiniest […]

    / Aug 15, 2014 at 1:01 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

    New Ratings Arrives, Will Do Nothing To Keep Others Honest

    There are apparently companies without the resources to buy triple-A credit ratings from the Big Three. A little fourth has arrived to help, but plans to studiously avoid stepping on larger incompetent toes.

    / Jan 16, 2014 at 2:27 PM
  • News

    EU Takes Page From U.S. Playbook, Re: Credit Ratings Agencies

    Fact: The Big Three perhaps maybe haven’t done the best job rating bonds, sovereign or otherwise. Fact: Powerful governmental bodies aren’t especially happy with some of those ratings, even if they were indisputably right. Conclusion: Kick’em while they are down.

    / Dec 2, 2013 at 5:45 PM
  • Here is an obvious visual pun on one ratings agency getting a bit out of line. The cows encourage obviousness.

    News

    Bond Rating Agency Decided To Try To Rate Some Bonds

    What does a AA credit rating mean? The intuitive answer is something like “it means that the rating agency rating the thing thinks it has a probability of default no higher than X% and no lower than Y%,” where X and Y are the boundaries of AA- and AA+ respectively, and sure, that’s about right. […]

    / Aug 1, 2013 at 11:44 AM
  • I can't even any more

    News

    Judge Doesn’t Believe S&P That No One Believed In Its Ratings

    The judge hearing the Justice Department’s CDO-rating lawsuit against S&P refused to dismiss it yesterday, rejecting S&P’s much-mocked theory that its pre-crisis claims of independence and objectivity and, like, plausible ratings were just “puffery” that no one should have taken seriously. Here is the story, and here is his opinion, and here is a rhetorical […]

    / Jul 17, 2013 at 5:06 PM
  • Get ratings right? Hmm. I hadn't thought of that.

    News

    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
  • You have underestimated me for the last time.

    News

    Apparently Some People Pay Attention To Ratings Agencies

    Would you have predicted this? This paper investigates the impact of credit rating changes on the sovereign spreads in the European Union and investigates the macro and financial factors that account for the time varying effects of a given credit rating change. We find that changes of ratings are informative, economically important and highly statistically […]

    / Jun 17, 2013 at 9:41 AM
  • At the round table.

    News

    The SEC Will Keep Talking About Credit Rating Agencies Until Everyone Stops Paying Attention

    You don’t have to agree with everything the SEC does to respect the way they do it: passive-aggressively. Felix Salmon this morning discussed “the problematic JOBS Act, where the SEC has done a good job of stalling on various silly yet Congressionally-mandated reforms,” and the SEC’s similar strategy of “being sensible and dragging its feet” […]

    / May 14, 2013 at 6:27 PM
  • Oh hey cow.

    News

    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
  • SEE YOU IN COURT

    News

    Controversial New Theory: S&P Got A Few Ratings Wrong

    One day – one day soon – the Justice Department will sue S&P for mis-rating a bunch of CDOs, and when that happens let’s all read the complaint and then meet back here to discuss it, okay? [update!] In the meantime we have S&P’s preemptive denial: A DOJ lawsuit would be entirely without factual or […]

    / Feb 4, 2013 at 5:10 PM
  • cut yer hair ya hippie

    News

    At Long Last Egan-Jones Has Been Brought To Justice

    The SEC’s press release touting its triumph over rebel-without-a-cause rating agency Egan-Jones gives just the slightest impression that it was written in embarrassment. A trope of SEC press releases is “[thing we are enforcing] is among the most important things in the whole wide universe”; this is hard to say with a straight face when […]

    / Jan 22, 2013 at 4:07 PM
  • more cow

    News

    Turns Out Global Regulators Are Fine WIth Using Credit Ratings To Decide What Banks Can Do

    It’s popular to say that financial markets and regulators have extremely short memories and so let’s say it about these new Basel liquidity coverage ratio rule changes out today. But not in an annoying sneery way. I mean, in an annoying sneery way, but not the obvious one. The story is that among the post-2008 […]

    / Jan 7, 2013 at 4:53 PM
  • "Bull leapers" fresco from Knossos. There's all sorts of interesting archaeological debate about what exactly is going on here, but I confess I'd trade it all for a photograph of an actual cow standing next to a Greek temple. You can't win them all.

    News

    Greek Bonds Now Defaulted, Also Extra Attractive

    You can see why no one likes rating agencies. It’s not exactly a surprise to anyone that Greece’s debt situation is Not Good, so the fact that S&P just downgraded Greece to selective default is (1) not particularly helpful to anyone attempting to make an investment decision re: Greek bonds and (2) not particularly helpful […]

    / Dec 5, 2012 at 6:03 PM
  • Carson Block of Muddy Waters. Not to be confused with a cow.

    News

    Skeptical Investor Puts Trust In Ratings Agency

    You may be aware that noisy Asia-focused short-seller Muddy Waters is in a fight with Singaporean agricultural commodity trader Olam. Muddy Waters thinks that Olam is “an extreme example of an increasingly important conflict in modern finance: the clash between accounting and business reality,” and that “it is instructive to view Olam through the lens […]

    / Nov 30, 2012 at 11:36 AM
  • more cow

    News

    This Election Day, Remember Your Constitutional Right To Carelessly Misrate Structured Credit Products

    Have you finished reading Judge Jayne Jagot’s 43,000-page opinion in the Australian CPDO case yet? Good, because we’ve got to move on to other things.1 Like: what does it all mean? One obvious thing that it could mean is “nothing,” or at least not very much. The case involved $30 million of damages, and there […]

    / Nov 6, 2012 at 3:36 PM
  • The internet tells me this is some sort of Australian cow. Err, bull.

    News, Rating Agencies

    S&P Gets In Trouble For Giving AAA Rating To Obviously Terrible Thing

    Oh man, CPDOs. CPDOs! Why was I not aware? This Australian court decision is like 3,000 pages long but it is riveting; if you built a CPDO, email me, I will buy you a drink and you can tell me all about it. My God it’s so beautiful. The story is that ABN Amro invented […]

    / Nov 5, 2012 at 6:11 PM
  • Cows, how I have missed you

    News

    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
  • Not that I want to presume, and you can really never know how any other being experiences the world, especially not from a single photograph, but: this cow seems to have a nice life.

    News

    S&P Has A Perfectly Good Explanation For Rating Deals “Structured By Cows,” Which A Lucky Federal Jury Will Get To Hear

    If someone builds structured credit securities out of some dodgy stuff, and someone else rates those securities AAA for no particularly good reason, and someone else sells those securities to you without reading the offering memo, and you buy those securities without any due diligence since you figure that the structurer and rater and broker […]

    / Aug 20, 2012 at 2:32 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
  • GET IT?

    News

    Banks Sell Products That Make Them Money. So Do Ratings Agencies

    The role of the hero who has been in the belly of the beast and emerged to slay it seems to be psychologically rewarding,* because people keep trying to claim it for themselves. Like this Geoffrey Tomes gentleman, who bared his soul to tell DealBook that he “was selling JPMorgan funds that often had weak […]

    / Jul 3, 2012 at 1:32 PM
  • News

    Fitch Could Not Think Less Of Greece Right Now

    Fitch ratings agency downgraded debt-crippled Greece deeper into junk territory on Thursday, warning of a “probable” Greek exit from the euro currency union if new national elections next month produce an anti-bailout government. Fitch said it had cut Greece’s rating by one notch, from B- to CCC, the lowest possible grade for a country that […]

    / May 17, 2012 at 2:30 PM
  • News

    Quo usque tandem abutere, Egan-Jones, patientia nostra?

    Lawyers all know the old case in which a guy sued another guy over a dead fox that Guy A chased and Guy B caught. Who owns the dead fox?, the case asks. It’s hard to care. My professor asked the better question, which was: just how much was a dead fox worth? The answer, […]

    / Apr 24, 2012 at 6:00 PM
  • Credit

    MF Global Was Doing Great Until It Wasn’t

    “Every banker knows that if he has to prove that he is worthy of credit, however good may be his arguments, in fact his credit is gone,” but every banker also seems to forget the modern corollary, which is that, if you have to prove you are worthy of credit, however good may be your […]

    / Jan 30, 2012 at 6:25 PM
  • News

    Europe Needs A Better Blender

    I guess we should talk about Europe and credit ratings. Now France isn’t AAA and Italy isn’t A and Portugal isn’t investment grade and here is something that someone at S&P actually said: Our role is to give timely information to investors and if you give them timely information, if you give it to them […]

    / Jan 17, 2012 at 11:58 AM
  • Banks, News

    S&P Downgrade Warning Gives European Politicians A Chance To Remind You That Eurozone Crisis Is All S&P’s Fault

    Maybe this is just an effect of distance or translation, but one thing I really like about reading the fulminations of European politico-financey types is that they are savvier than their American counterparts about who to pick on. I never see a European politician or central banker quoted in the FT attacking poor children. They’ve […]

    / Dec 6, 2011 at 6:45 PM

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