Game Over For Moody's On Einhorn Kiss Of Death? Stock Plunges After Greenlight Strategic Short Revealed

Tyler Durden's picture

Update: the Einhorn-Ackman dynamic duo does the groupthink tango, as Ackman joins Einhorn in bashing rating agencies. Tomorrow's MCO open will be a bloodbath

It's official: Moody's is the next Lehman. The ratings agency just received the kiss of death after David Einhorn announced he is short the name at the Ira Sohn conference (we are not sure how this is news...Einhorn has repeatedly noted his hatred of the rating agency). With numerous other adverse catalysts, such as the pending Wells Notice, as well as the fact that its business model is conflicted is obsolete, this was the straw that broke the camel's back. And since we are confident that uber honest capitalist Waren Buffett is by now completely out of the name, replaced presumably with the same idiot middle east sovereign wealth money that just gulped up the Treasury's Citi stake, there won't be too many tears wept at its funeral. RIP Moody's.

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Cognitive Dissonance's picture

I've been wondering if Uncle sorry......I mean Uncle Waren might not see this as an opportunity to swoop in and pick up Moody's for pennies and then lend his "good" name to rejuvenate it as a mean & clean rating machine. Then he can rate everything to the moon that he wants to dump first.

But seriously it might make him at least. Personally I would run to the hills but that's just me.

Mitchman's picture

Doubtful from my point of view.  Too much event risk from the regulatory side.  At this point in time, no one except the little guys has lost any money. When the SHTF, the lawsuits will pile up and people will be looking for scalps.

Buck Johnson's picture

You are correct, its to risky.  Because once everything starts to come apart everyone and their mother will be throwing lawsuits at them and each other to recoup money that is no longer there.  And with anything once the rules are thrown out it will be every man for themselves company speaking and they will be pointing the finger at each other.  But in particular MOODY and the other rating agencies will be the one to go after because they rated this junk and it was junk pure and simple.  I think the only reason why their hasn't been any lawsuits after some of the emails about rating a security if a cow did it, is because so far they have been able to keep everybody on board in the extend and pretend and the mark to magic (as one poster put it).  But that won't last for long and it will be a blood bath.

Cursive's picture


LOL.  Do you know Michael de la Merced?

Cognitive dissonance: ackman speaking in falsetto voice of Mr. Bill in speaking re $ggp #irasohn2010 #longdayforeveryone

MrTrader's picture

Moody's `They deserve it ! By the way : uncle Warren has sold a huge part of his holdings ;=)

hound dog vigilante's picture


death of ratings agencies = foregone conclusion.

that markets react this way tells you just how overvalued markets truly are right now... nothing negative is 'priced in' at all.

markets = Wiley Coyote off the edge of the cliff...

cougar_w's picture

The news hasn't been priced into the market for 2 years because algos don't read the news.

ThreeTrees's picture

Could it not be that it HAS been priced in and it's just that the low watermark has been raised by massive inflows of liquidity?

hound dog vigilante's picture

so... equities already reflect future inflation. and all equity investors are onboard b/c they are all buy & hold, ultra-long term investors.

so of course equities have been preemptively inflated!  what could possibly go wrong in the foreseeable future?  Nothing!  Our world is a padded-room, free of risk!


chet's picture

Why can't we just get the sheiks to buy all the remaining toxic crap and we can just move on?

Mitchman's picture

They have their own toxic crap.  It's called Dubai.

Cheeky Bastard's picture

Not anymore.

Restructuring was announced over a month ago.


geminiRX's picture

Shit like that is unlikely to be restructured successfully in this environment (both economically and environmentally). The desert will likely reclaim Dubai making it the largest ghost city in the world some day. The place was devoid of tourists when I went last year. My 5star suite that was worth >1000 per night fetched $200

Cheeky Bastard's picture

It was more for the reason of preventing the surge in CDS and counterparty risk than anything else. I think ADSWF bought all CDS outstanding for a premium.

Mitchman's picture

You are correct, of course.  However, it is hard to believe that they will hold up during this next crunch.  Your thoughts will be appreciated.

Cheeky Bastard's picture

there is a shitload of synthetic stuff floating out there which has Dubai stamp over it. ADSWF only bought CDS outstanding on normal bonds, not on synthetic stuff which is still floating out there. But Dubai has nothing to worry about anymore, since it has pulled all of its bonds out of the market. Synthetics are now the sellers risk as are the collateral calls which have surely came pouring in when the announcement was issued.

Mitchman's picture

Excellent point and thank you for the clarification.  I will impugn a more deserving target the next opportunity.  :-)

cougar_w's picture

We won't have to eat the rich, we can just wait and watch while they eat each other.

Though the last rich guy standing is going to be one mean mo'fo.

wawawiwaa's picture



Historically that guy has been called by several names including King, Ceasar, Kahn, etc... and yes... they kicked a#$%^& and took names.



OldTrooper's picture

Ahhhh! Yesterday was a good day.  Consumed the last of my rich rivals.  Now, where's my breakfast!

MsCreant's picture

Look at all these posts from TD and Marla. The financial system will collapse because everything is going to be frozen in a gridlock of court cases. Folks will need to make margin calls. There will need to be a holiday as momentum picks up.

The Shit is Hitting the Fan. Get ready for the spray.

This is called smelling it before it hits you. Kinda like the gulf spill.

Mr Lennon Hendrix's picture

The vampire skunk!  I guess Octopi spray too, but skunks are funny.

Edna R. Rider's picture

And only 15 minutes after Einhorn's announcement, Buffett announces he's going to testify on MCO in front of congress.  My o My, how the rich are different than you and me.

knukles's picture

Let's define the Power Elite.  Those that shall never feel the steel of handcuffs nor the humiliation of the perp walk, whatever their crime.
Implies (an understatement) an economic shared interest between the politicals and thier economic providers.

So, Warren gets to go in front of his political counterparts to explain Moody's case.  As if he'd been running it hands on, maybe?

Poor fellow just cannot seem to get a break with Wall Street investments; Salomon, GS, Moody's to recollect a few.  But Warren is not alone in that experience either, remembering the GE connection to Kidder.  (And CNBC)  Sorta like outsiders investing in Hollywood;  about as successful as Chamberlin's Peace in Our Time.

"As a dog returns to his vomit, so to a fool to his folly."-Proverbs, 26:11

Apostate's picture

Few on Wall Street like Warren. Much less so his healthcare bill.

I mean, it was one thing, when you could just make money trading derivatives that are based on nothing, because American companies are all pieces of shit anyway that have barely produced an iota of technological advancement since the late '90s.

Though, hell, if the regulations had supported it, we might've had an internet in the '70s or '80s. Technological and social advancement is actively and openly suppressed by politics and the crazy university system.

Now, it's becoming apparent that all the paper is going to be worthless. So we may have to just go back to creating real companies that change the world before 1 billion Chinese eat us alive.

So NOW people get off their ass to do something about the situation.

Fuckin' Omaha.

Mercury's picture

Officially Buffett is answerable to BRK shareholders not Wall St. and most of them do like him.

A certain level of computing firepower (ultimately developed by private enterprises like Intel) had to have been in place for the Internet to become the Internet. Pamela Anderson is more effective in a medium with fast loading graphics than one with just green ASC II text.

For years in the 80's France had a (government run) WWW-like system called MiniTel which was great at the time (and mostly limited to green text) but it never really developed beyond a certain point when the WWW itself started becoming big.

QQQBall's picture

Salomon Bros worked... He did well, no? GS is still paying, but I have no idea if he made dough on MCO or not.

Apostate's picture

That was then, this is now.

wawawiwaa's picture

Must be nice to be able to make a stock tank at will by saying something completely obvious and being yourself. 

Mercury's picture

It' helps to be known as the smartest guy(s) in the room, for doing the homework, putting lots of money where your mouth is and being right again and again.

I knew Einhorn and Ackman would deliver at this thing.

Turd Ferguson's picture

I've got 121.60 on the euro

Christobevii3's picture

Bought january $10 puts a couple of weeks ago and already up 50%, hell yeah! 

Popo's picture

It couldn't happen to a nicer bunch of insider criminals.

Me XMan's picture

How much Buffet own this Moody's?

MiguelitoRaton's picture

Slammed in after hours. And I thought failure was rewarded in this Farcist system.

bigdad06's picture

It's about damn time! Good riddance to the bastards!

Nikki's picture

A RICO case should have been the downfall of this POS company, not a bear raid. Kind uncle Warren is more like uncle Ernie in Tommy.

holdinmyown's picture

Ackman's bought up 150m shares of $c in recent weeks. No time for elaboration #irasohn2010

Leo Kolivakis's picture

Not news to me, and I agree with Einhorn, this puppy is a dead sucker.

geminiRX's picture

I nominate Zerohedge to replace Moody's as a ratings agency:)

johngaltfla's picture

Is it possible to kill a vampire without actually driving the stake through its heart? Then burning it with napalm. Then maybe pouring acid on the remains? Hell, we all thought Citi was finally killed and that piece of crap rose from the ashes.

AccreditedEYE's picture

Chris Whalen used to call it the zombie love party. You wanna see something REALLY frightening, check out the government agencies exposure to the mortgage market and how... well... that is going. LOL

johngaltfla's picture

Chris Whalen is a must read whenever the banksters are discussed. And his opinions on the rating agencies are classic. Sadly, nobody wants to listen to what he's been warning about until it becomes a full blown crisis. Between the GSE circus and banksters lying about their books he's going to remain a very, very busy man.

LeBalance's picture

It is much more exquisite to withhold food. :)

lynnybee's picture

i love this website !   being a "newbie", i'm learning so much !  thanks, ZEROHEDGE !