Just like I said so yesterday.People just don't get it: ok, MCO's business will be hit because of its tarnished reputation? But where is the alternative? Dis S&P or Fitch rated those junk when MCO rated them AAA?
DONT COUNT ON IT!
It's not that they will go out of business, but the way they conduct business and their market share will be very different.Profits will go way down with new regulationNew competition will cut into market share.Most of the banks/financial institutions are still around, it's just that many are trading at 10 or 20 cents on the dollar.Banks took the hit, lenders took the hit, insurance companies took the hitThe Ratings Agencies had somehow avoided the carnage -- that THEY caused.They are just coming back into parity with other financial institutions.Not saying anyone ought to go short here -- just saying the business model has changed
you are right; no alternative. They are still the best at what they do. You can't simply can't replace the skills they have or the people or the brand.You could go without I suppose; but that would be stupid. Where do the institutions go to CYA ?
dont be naive their replacement will be simple.Instead of 3 - there will be 20The pie gets smaller and it is shared by a larger group of players.Each is smaller and will be held accountable for future ratings.MCO is a thing of the past.I just sold all my hedge calls - tripled my puts.(long mhp calls as hedge)
bill in congress sets up a non profit or something alternaive for state pension funds (huge aggregate) to use verus these guys
Keep your hope high. MCO even rates U.S. So can the government rates itself?