People make bad investment decisions all the time, and it can be argued that it is not the government's responsibility to prevent people from making bad investment decisions. I agree with that, but the Federal Government has a responsibility to see to it that people are not being sold snake oil as a cure for all their ills either.
Systems are no better than the quality and integrity of the people that operate them. The Food & Drug Administration is not perfect, but it is better than nothing at all. The county auditor places a seal on a gas pump that lets the consumer know that they are getting a full gallon of gas for their money. Then why is it that a public corporation can decide what constitutes a triple-A rating on a mortgage-backed bond and bring an entire nation's mortgage-backed bond market to the melting point?
When you look at the position that the three major credit rating agencies held and still hold in the rating of structured debt in the United States, I have to ask myself, do they, our Congress, really understand the influence that these three credit rating agencies have over the safety of our financial system and our capital markets?
The inability of our government to act in a more responsible manner as it pertains to the credit rating agencies and put in place firmer regulations as it concerns the rating of structured debt instruments, leaves the door open to continued abuse of the capital markets system. The new changes in regulation of the credit rating agencies, that are called for, are feeble when compared to the task and the billions of dollars that are at stake.
Stay tuned.
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3 comments:
If our Congress was able to discuss and debate issues for the betterment of its' citizens, can you imagine how dynamic the United States would be? We would be looked upon as the best form of government and hopefully others would strive to be similiar to ours. However, this is not our reality. Each side bickers and denigrates the other side. Each side wants to win....winner takes all. I really don't see everyone coming together.
Have you watched the committee on healthcare this week in its discussions. They want to pass the bill without anyone being able to read it first. They passed it and without anyone reading it other than the writer. Demos vs Repubos, this one goes to the Demos. I can't understand how these clowns, on both sides of the isle, stay in office after watching some of these proceedings.
Winslow and Butch, I have nothing to add to your comments. I think you both said it all. You both are right on the money!!!
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