Growing mistrust of rating agencies Standard & Poors, Moody's and Fitch

[cyu]

Not exactly revolutionary, but it's not hard to imagine that the existing agencies would use their clout as a political weapon against leftist movements.

Excerpts http://www.reuters.com/article/idUSLDE6220EG20100303

European Union finance ministers are pushing the European Central Bank to develop its own rating system for euro zone countries

The paper quoted one official saying the plan would free the euro zone from its dependency on international rating agencies such as Standard & Poors, Moody's and Fitch.

"The agencies have been completely wrong in the case of Lehman. Who can be sure that they won't be wrong again"

ECB policymakers have been made acutely aware of problems of the current system by Greece's growing troubles.
Were Moody's to downgrade Greece below the crucial 'A' threshold --as the other two main agencies have-- Greek debt would not be able to be used as collateral in ECB lending operations come the end of the year.

[RadioRaheem84]

This was an issue in the States too as people were pushing for an agency within the government to take over the role of the rating agency. But this ended up being pointless because the point of the matter was that derivatives should be outlawed all together not having the job of the rating agencies be taken over by the Federal government.

[ckaihatsu]

The following paragraph really caught my eye when I read it because it *encapsulates* the current economic condition:





David Roche writes in the Financial Times: “As all the AAA-rated nations in Europe have 70-80 percent of gross domestic product public debt ratios already—not far behind the ‘junk bond’ states (and worse than Spain)—we reckon the market will soon wake up to the fact that this deal is a form of contagion by official action.”

http://wsws.org/articles/2010/may2010/bail-m11.shtml


This description of our human-societal reality has the effect of revealing the "man behind the curtain" who's pulling the levers -- it takes a severe *valuation* crisis, like that of 2000 or 2008 or now, to exhibit the balkanization and potential *discord* among the members -- nation-states -- of the international bourgeoisie that breaks out when there's no payoff to financial cooperation anymore.

[ckaihatsu]

---







European Union finance ministers are pushing the European Central Bank to develop its own rating system for euro zone countries

The paper quoted one official saying the plan would free the euro zone from its dependency on international rating agencies such as Standard & Poors, Moody's and Fitch.

"The agencies have been completely wrong in the case of Lehman. Who can be sure that they won't be wrong again"

ECB policymakers have been made acutely aware of problems of the current system by Greece's growing troubles.
Were Moody's to downgrade Greece below the crucial 'A' threshold --as the other two main agencies have-- Greek debt would not be able to be used as collateral in ECB lending operations come the end of the year.

[ckaihatsu]

So here we're able to see that the *political assessment*, or value judgment, of the (arguably) objective financial numbers is an *arbitrary* one made by the powers-that-be -- "a form of contagion by official action", according to Roche.

So, in short, who's to say *how much* sovereign debt overhang is "acceptable" or "respectable" -- ??? This arbitrariness, of course, extends downward and applies to *any* entity or individual below this overall, *planetary* level...!