Bill Black's 'Alternative' to the Rating Agencies: "Get Rid of Them"

Speaking as a former rating agency employee, there could be nothing better for this country than exiling S&P, Moody's, et al into oblivion. The process is a joke, the transparency is a fallacy and the caliber of the majority of the"analysts" is marginal at best. There is no way that the analytical teams at the rating agencies can compete intellectually with the brightest at the investment banks. They are always a day late and a dollar short.

Simple solution. Have a Government rating agency as well working independently with occasional ethics reviews. ;-)

It's a patently perverse system. Apparently now they're looking to rate "teenage-backed bonds," where teens securitize their future earnings and parcel out that risk to bond investors from across the country. Outrageous.

Gentlemen: Get rid of the rating agencies all agencies including the consumer's like equifax, experian etc. all they do is bad for the economy and is very very much so negative for all us.
Thank you

I agree. Rating agencies provide no value because their valuations have been biased or just plain wrong for years. Trash em.

I can read a company SEC filing myself. The problem is the reports are not standardized. STANDARDIZE the corporate reporting forms. Then I won't need an analyst to interpret it for me and the analyst won't get it wrong for me.

Very good interview Arron.... is Obama taking 5 minutes to listen to these crystal clear and objective analysis. Keep up the honest and open reporting. Thanks & God bless !

Why are those that still think credit rating agencies believe their practices will change. Each securities brokerage firm has many analysts. Why doesn't each securities firm do their own research. That way we would be able to separate the men from the boys. Hiring out bought opinions is very insane. Let the reputation of each brokerage take a free market approach. Those that hit the right mark survive, and let the losers --lose customers. Is this too complicated for you Ivy league clowns? Get busy and do your job right.

The economist is naive and uninformed.

On Wall Street there have always been credit analysts working for bond shops that have made their money performing better credit analysis than Standard & Poors and Moodys. The private bond houses have been competing with and beating S&P and Moodys forever. And after new analysts at S&P and Moodys learn their trade, they go to work for the private bond houses.

The world needs to be run by robots. Humans cannot be trusted. Logic, not emotion, needs to prevail in order to save humans from themselves.