January 1, 2009

The standard that keeps us poor

A high-priced receiver with a five year, $50 million contract drops a short pass. How many times have you said, "Well, I can do that."? Seems I now say it at least once a day, especially after reading the morning's headlines on the financial crisis. I'm starting to feel as if I know more than the supposed industry "experts." Scary thought, folks, because I ain't all that smart. From the Wall Street Journal:

"Standard and Poor's Ratings Service is reviewing how it assigns ratings to collateralized debt obligations of structured-finance securities because of changing market conditions amid the deepening recessions in the U.S. and Europe."

Good to know. Why didn't they begin said review a year ago, when the firm's high-priced forecasters should have seen the pass coming, but instead promptly dropped the ball (I'll dispense with the football analogy). Their only standard seemed to be to ensure retirees are poor. Rating agencies and CDOs; could there be two more despised terms at the moment? You have to wonder why they'd suffer additional embarrassment by announcing the review now, rather than quietly going about it internally. Talk about a day (year) late and a dollar (billions) short.

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