ratings agencies

  • 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
  • Ratings Agency

    Ratings Agencies Incentivized By Incentives, Part 2

    A thing about credit ratings is that issuers pay for ratings, and the issuers who pay more get better ratings. This is a problem that many people want to solve either by the obvious approach of having someone else pay for ratings or by the fancier approach of having issuers pay for ratings but not […]

    / Nov 18, 2011 at 12:45 PM
  • News, Ratings Agency

    What Are You Paying Ratings Agencies Zero Dollars For, Anyway?

    Fitch released a report today saying “ohmygod banks Europe” and the market went down and maybe there’s a causal link, whatever. The report mostly takes notice of US banks’ European exposures in general, and the mystery of net versus gross derivatives exposure in particular, in which one asks “if Bank A sells CDS on $100bn […]

    / Nov 16, 2011 at 7:14 PM
  • News

    Ratings Agencies Incentivized By Incentives

    Back when “Meredith Whitney says all your munis are belong to default” looked like it could be more like her bank calls than, say, Harold Camping’s apocalypseseses, muni issuers and bankers liked to point to the fact that municipal bonds actually defaulted much, much less often than corporate bonds at the same ratings category. Which […]

    / Oct 28, 2011 at 3:37 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
  • News

    Nothing Will Ever Be AAA Again

    We assume that you, like everyone else, have been madly dumping Treasuries now that S&P has downgraded them. Smart! And presumably in your flight to safety you’ve been buying AAA rated corporate bonds, from let’s say XOM or MSFT. Which are obviously safer than Treasuries because, while sure the U.S. Treasury can print dollars and […]

    / Aug 8, 2011 at 11:52 AM
  • News

    So Standard & Poor’s Maybe Can’t Do Basic Math, So What?

    Off by $2 trillion? NBD.

    / Aug 5, 2011 at 8:15 PM
  • News

    Baby Powder Producer Stronger Credit Than World’s Only Superpower

    The Times today has a long piece about companies that lost their AAA ratings, with the number of nonfinancial AAAs going from 60-ish in the 1980s to four (JNJ, ADP, XOM, MSFT) today. Why did they lose the AAA rating? Well, “it became seen in board rooms as more of a straitjacket than a path […]

    / Aug 3, 2011 at 1:55 PM
  • News

    Fitch Unimpressed By Debt Deal, GDP; Markets Unimpressed By Fitch

    S&P has made it so enticing to get involved in U.S. debt politics that the other agencies are jumping on the bandwagon. And Washington can’t win: while S&P continues to talk a big game about downgrading the U.S. for not cutting enough spending, Fitch is pinning its ratings outlook to GDP growth, which some economists will […]

    / Aug 2, 2011 at 6:11 PM

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