FT Alphaville » Ratings Agencies

Ratings agency puffery

Joseph Cotterill — Mon, 22 Apr 2013 22:19:28 +0000

Not our argument — McGraw-Hill’s.

An interesting tack is taken in its lawyers’ motion to dismiss US charges of civil mortgage fraud against Standard & Poor’s, as filed on Monday…

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S&P killer, qu’est-ce que c’est?

Joseph Cotterill — Tue, 05 Feb 2013 17:26:45 +0000

Did the world not already know that a CDO analyst at S&P parodied Talking Heads “Burning Down the House” as the residential market teetered in 2007?

Like “it could be structured by cows and we would rate it”, it feels like a meme that would need to be invented if it didn’t already exist.

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The US v S&P

Joseph Cotterill — Tue, 05 Feb 2013 14:13:40 +0000

Hat-tip to the WSJ Law Blog, the full US government complaint against Standard & Poor’s:

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Lighting a FIRREA under Standard & Poor’s

Joseph Cotterill — Mon, 04 Feb 2013 20:05:26 +0000

Update, 8:40pm UK time — Shares in McGraw-Hill were down 15 per cent at pixel.

Fresh in the inbox…

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Solipsist & Poor’s

David Keohane — Fri, 18 Jan 2013 17:15:06 +0000

Thanks to Reuters Jamie McGeever for spotting this rather circular bit of introspective logic from S&P. You see, the ratings agency has discovered that its own sovereign ratings are a good guide to its future sovereign ratings. So, for example, since 1989, they have never lowered a sovereign rating with a positive outlook.

It’s the kind of record you fight to keep.

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Decoding that Basel securitisation proposal, one annoying acronym at a time

Lisa Pollack — Thu, 20 Dec 2012 13:19:28 +0000

The financial crisis demonstrated how the treatment of securitisations under the Basel framework was some combination of delinquent and a massive enabler of rating agency (and bank) mis-modelling. No wonder then that it only took until July 2009 to get the duct tape out, i.e. release “enhancements” to Basel II, commonly known as “Basel 2.5″.

Now that the committee has had time to truly, madly, and deeply think it over, it’s time for… drumroll… a consultative document on which comment will be sought by March 15, 2013. Oh, it’s on now.

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Hey look, even wealthy countries can suffer creditworthiness-threatening financial crises

Kate Mackenzie — Tue, 18 Dec 2012 10:51:38 +0000

Moody’s announced on Tuesday that it’s reviewing its sovereign credit ratings methodology, and seeking comment from industry participants.

The review comes probably not a moment too soon — and we are not just talking about the French getting very cranky. Bloomberg reckons Moody’s sovereign ratings are unpopular, even by the low standards of sovereign ratings popularity:

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The ESM loses an Aaa

Joseph Cotterill — Fri, 30 Nov 2012 21:57:01 +0000

Moody’s has cut the eurozone bailout fund’s credit rating to Aa1, and maintained a negative outlook. It also removed provisional Aaa ratings from debt issued by the EFSF.

In a statement, the ratings agency blamed… France, whose own Aaa rating it cut last week:

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Moody’s cuts France’s Aaa rating, may want to check if its next baguette explodes

Joseph Cotterill — Mon, 19 Nov 2012 22:35:31 +0000

Moody’s has cut France to Aa1 from Aaa, maintaining the negative outlook originally conferred in February.

Pierre Moscovici, French finance minister, was stoic at pixel time. “Moodys is now giving France the same rating as Standard & Poor’s, which has allowed us to live with low interest rates for many months,” he told Reuters. S&P cut its AAA rating for France back in January.

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