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Barney Frank Declares War On Moody's

Tyler Durden's picture




 

This one is looney tunes prime time material. Populist champion for the people, Barney Frank who earlier started war on mark-to-market and republicans, has added a new front to his offensive: Moody's rating agency. The reason: Frank's displeasure with the possibility that Moody's will downgrade America's municipalities as this "action will raise interest rates on cities and towns making it more expensive to borrow funds for infrastructure developments." As a result Frank threatens to hold a hearing in May to explore "the unfair treatment of full faith and credit general obligation bonds."

Several points here:

1.Why did nobody have a problem when Moody's was upgrading every piece of toxic paper in the universe?
2. Why did nobody have a problem when Moody's downgraded AIG and the ensuing collateral calls resulted in billions of taxpayer money being used to save the biggest black hole in financial history?
3. What will be the impact of Moody's eventual downgrade of the United State itself, whose GDP-to-debt ratio will soon easily surpass that of Ireland, which recently got some tender love from the raters?
4. Most obviously: just how far does Barney plan to take legislative intervention with regards to all future potential downgrades (or upgrades)? Will every rating action first have to get his seal of approval before it becomes public?

 

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Tue, 04/14/2009 - 01:35 | 1891 patrick the painter (not verified)
patrick the painter's picture

warren buffet owns 20% of moodys. Maybe it was warren at the request of Goldman to pull AIG rating

Tue, 04/14/2009 - 01:36 | 1892 Anonymous (not verified)
Anonymous's picture

warren buffet owns 20% of moodys. Maybe it was warren at the request of Goldman to pull AIG rating

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