After the economic collapse of 2008, there were plenty of people to blame, and some of the blame was placed on the ratings agencies or the seal of everything Triple-A rated, when many, in hindsight, considered much of it to be rubbish. . Of course, they are not the only ones to blame, as there is a lot of blame to go around for what happened. Now the United States government and their regulatory agencies have stated that they will be keeping an eye on these big corporate credit rating companies that rate everything such as; sovereign debt, municipal bonds, corporate bonds and multinational banks.
You see, the big joke was “who is rating the rating agencies” which has always been the commentary with any authority or group tasked with looking out for everyone else’s best interests, viz; “Who’s watching the watchers?” Yeah, well, it’s nice to finally see someone going to rate the ratings agencies, unfortunately it’s hard to say if those who will now be watching are a reliable source to do so. After all, every time we turn around we see that the SEC has made mistakes and let a great deal of fraud slip through their fingers, often right under their noses; The Bernie Madoff scandal, for example.
Okay, now it’s time for the rant;
About time, however, I think this is problematic due to a conflict of interest, as these same ratings agencies rate US debt, and the SEC will go after them if they downgrade that, even if the debt should be downgraded . Will the rating agencies do it even though they feel the government is being tough? Good?
Still, while the SEC is busy reviewing these rating agencies, both large and small, well, while they’re at it, ask these rating agencies why they didn’t downgrade corrupt Chinese banks; Rating agencies obviously don’t want to do that, as they could be locked out of the big Chinese market for financial analyst data.
Sometimes my mind tells me that everyone is a scam and everyone knows it, and so are all the regulatory agencies. Worse, they all went to the same schools, the lawyers on both sides, government and business – it’s a sham, a joke, and you can’t trust anyone, and everyone knows it, crony capitalism has taken over . My mind is playing tricks on me, why do I think that? Simple observations, my friends, and there’s too much evidence not to get cynical, but if we can’t trust the system, then we’ve already lost.
Now that’s going to be a rant, but maybe we need to talk more about this? Maybe we need a good, solid national dialogue on business ethics, regulatory government ethics, and the crony capitalism that pervades our free markets and inevitably impedes this strong global economy we all seek. In fact, I hope you will please consider all this and think about it.