Momentum Indicator by J. Welles Wilder
Dec 08

Who does indeed!  To rate or not to rate, that’s the question.  Do rating agency rating agencies exist?  If not, perhaps they should.  But then again, this would merely defer the issues at hand to the next level…

European countries are currently reacting rather unnerved by some of the comments leaking out from a number of rating agencies.  Especially Standard & Poor’s and Moody’s are frowned upon on the east side of the Atlantic.  In Europe, the rating agencies are seen to deepen the region’s debt crisis.   The rating agencies respond by claiming that their valuations will spur the Europeans to get their act together.  If this response is their real agenda, it would mean that rating agencies now think they need to force politicians to leave their comfort zone and finally start getting their act together.  Rating agencies becoming policy enforcers, is that really what they should be about?  This raises a number of interesting questions:

  • Who rates the rating agencies?
  • Is rating agency ownership disclosed?
  • Who is in control of rating agencies / what is their agenda?
  • Are rating agencies an instrument used by a higher echelon?

I for my part cannot answer these questions, but I’m eager to find out!

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