{"id":3010,"date":"2008-09-15T23:51:02","date_gmt":"2008-09-16T03:51:02","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=3010"},"modified":"2008-09-15T23:51:02","modified_gmt":"2008-09-16T03:51:02","slug":"obama-and-the-credit-rating-agencies","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=3010","title":{"rendered":"Obama and the Credit Rating Agencies"},"content":{"rendered":"

My attention was caught by a throwaway line on Bloomberg<\/a>:<\/p>\n

Democratic presidential nominee Barack Obama said regulation of Wall Street needs to “catch up” with changes in financial markets, and investors can’t expect taxpayers to bail them out in bad times.<\/p>\n

Obama said the role of ratings services must be examined as part of any revamping of the way markets are monitored and regulated, and he suggested that he doesn’t favor having the government stepping in to rescue failing firms.<\/p><\/blockquote>\n

The role of ratings services?<\/p>\n

So I looked at his Economic Platform<\/a>:<\/p>\n

Improve Transparency in the Market<\/u><\/b><\/p>\n

Investigate Potential Conflict of Interest between Credit Rating Agencies and Financial Institutions<\/b>: Credit agencies are paid by the issuers of securities, not by the buyers of securities, which creates a potential conflict of interest in favor of issuing strong securities ratings. This problem was illustrated in the subprime market crisis in which credit rating agencies strongly rated subprime mortgage securities even as there were significant indications of large numbers of foreclosures and a weakening housing market. Barack Obama supports an immediate investigation into the ratings agencies and their relationships to securities\u2019 issuers, similar to the investigation the EU has recently announced.<\/p><\/blockquote>\n

The European Union Kangaroo Court has been previously discussed on PrefBlog<\/a>.<\/p>\n

We can only hope that – in both the Obama campaign and the EU – that these public utterances are made merely for populist appeal and signify nothing. But it’s not a good sign.<\/p>\n

I was actually more offended by another line from the Obama Economic Platform (emphasis added):<\/p>\n

Obama\u2019s STOP FRAUD Act provides the first federal definition of mortgage fraud, increases funding for federal and state law enforcement programs, creates new criminal penalties for mortgage professionals found guilty of fraud, and requires industry insiders to report suspicious activity<\/b>.<\/p><\/blockquote>\n

Yay! Even more Informers and Secret Policemen! The west’s moral fibre is going to hell. But when I start ranting about this stuff, people usually just treat me kindly, so I’ll shut up now.<\/p>\n","protected":false},"excerpt":{"rendered":"

My attention was caught by a throwaway line on Bloomberg: Democratic presidential nominee Barack Obama said regulation of Wall Street needs to “catch up” with changes in financial markets, and investors can’t expect taxpayers to …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[],"class_list":["post-3010","post","type-post","status-publish","format-standard","hentry","category-miscellaneous-news"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/3010","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3010"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/3010\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3010"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3010"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3010"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}