Please drop down the page and read this article written for the LA Times by Michael Hiltzik. There are many good points made in this article that deals with the problem of the credit rating agencies. There are a few technical points that fit into the overall picture and explain why the triple-A rating has an important place in banking. I realize that these are some very technical points as they relate to the banking industry, but I am afraid that until we tackle the technical points, because so much hangs upon them, that we will not understand the important role that the credit rating agencies play in the banking and investment industry.
The more people understand how the many pieces of the financial crisis fits together, the better chance that the politicians will have no cover to hind and not take on the changes in the credit rating agencies and the way they do business. We can not leave the credit rating agencies go on as they have in the past and expect that a more transparent market will emerge. This will not happen. When the majority of the people know and understand the deceit that these credit rating agencies committed, here in the United States and around the world, then the politicians will no longer be able to hind their misconduct as well.
The issue of the credit rating agencies is not just a minor point, it is what is at the cellular level of investments and banking both, and it must be addressed.
Stay tuned.
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2 comments:
How can we, as a society and civilization, be so intelligent (at least we think so) and yet be so ignorant.
Anyone with any intelligence will understand that credit rating is probably one of the most important issues in our society. Yet, it is ignored by the leaders that can actually make a difference.
Is it our educational system that causes us to ignore these facts? Is it our pride to then admit we were wrong? Is it human nature to ignore facts? Is it because we naturally resist change?
It's probably the same reason why so many of us drive cars that are not efficient. With what we know today, we shouldn't drive a car getting less than 30-40 mpg; yet the majority of us do just that!
We know what has to be done, our leaders know what has to be done; yet we do nothing or just attenpt to trickle-solve the problem.
At one time I thought America was a great society and we would have made these changes immediately.....now I see this is not true....we are probably like all other previous societies.
Winslow, I share your frustration. I am sure there are others out there, like us, that are wondering why this major, yet under the radar, issue is not getting more press and TV coverage. While we must, I think, continue to hammer away, and try to bring this issue to the attention of the general public, there are people out there that are fighting against the change that is needed. Vested interests with money and access to influence politicians, are two very powerful hurdles to over come.
So, I will keep writing about the "cancer" that the credit rating agencies are to our financial system if they are not changed and made to run for the good of us all, and not for the benefit of the few that benefit directly from their greed and misapplication of the rating system.
Eventually, the word will get around, I hope.
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