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The same ratings agencies that sold european countries Aaa rated empty boxes a few years ago now hold them hostage yet again. CDOs are Aaa. Enron is investment grade. But downgrade Ireland and Spain?!?!? Because, in part, of the fact that they had money tied up in your Aaa crap? Meanwhile - I feel like the folks at Moody's are doing this: 
Is anyone ever going to hold hold their feet to the fire, or make them make sense? If anything, being smart enough not to believe their 'expert ratings' should help.
It remains to be seen if Frank-Dodd will have any teeth, though. At least the bill opens the ratings market up to competition.
Still, I fail to see how a ratings agency can ever succeed and be transparent to investors. To be truly honest as a ratings agency, they would have to be transparent. To be truly transparent invites someone in to steal the business model. In the end, as with most things, it all comes down to buyer beware...
Is anyone ever going to hold hold their feet to the fire, or make them make sense? If anything, being smart enough not to believe their 'expert ratings' should help.
It remains to be seen if Frank-Dodd will have any teeth, though. At least the bill opens the ratings market up to competition.
Still, I fail to see how a ratings agency can ever succeed and be transparent to investors. To be truly honest as a ratings agency, they would have to be transparent. To be truly transparent invites someone in to steal the business model. In the end, as with most things, it all comes down to buyer beware...
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