Tag Archives: Moody’s

August 10, 2011, 7:33 pm

Still Standard, Still Poor

I posted the other day on the mysteries of the Standard & Poor’s US government credit demotion, and marveled that it was taken seriously in the light of S&P’s well-known and grotesque part first in inflating the housing bubble and then in accelerating the crash. The subsequent discussion in this space, as is its wont, was soon enough hijacked by one-note ranters who always have an all-purpose speech ready to the effect that all that matters are deficits—a subject that did not transfix the right when Reagan and George W. Bush were heaping up deficits; but I digress. It’s worth getting back to the subject of credit ratings, not only because they play a part in the actual world but because they point to a huge failing both in public understanding and in the journalism that’s hypothetically interested in elevating that understanding.

Commenter suomynona is (as it were) on the money,…

August 6, 2011, 7:34 pm

Standard and Poor?

By Todd Gitlin

The blogger Aaron Bady, who goes by the name Zunguzungu, has an interesting post up about Standard & Poor’s, the credit-rating company that just knocked down its rating of U.S. government’s creditworthiness after years of drastic errors about the value of mortgage-backed securities—errors with devastating consequences for the banks that took them seriously, and therefore for the global economy. He notes that The New Yorker’s James Surowiecki cast a skeptical eye upon the agencies almost two years ago:

The rating agencies’ role in inflating the bubble is well known. Less obvious is their role in accelerating the crash. Agencies have typically resisted changing their ratings on a frequent basis, so changes, when they occur, tend to be belated, widespread, and big. In the space of just a few months between late 2007 and mid-2008 (after the housing bubble burst), the agencies…