Pop Quiz: Who has the most influence over the world’s financial markets?
Tim Geithner, Ben Bernanke, our beloved Elizabeth Warren, new kid on the block, IMF Chief, Christine Lagarde, or Goldman Sach CEO Lloyd Blankfein?
Answer: None of the above.
The Answer: Raymond McDaniel and Deven Sharma… … Wait, who?
McDaniel and Sharma, CEO’s respectively of Moody’s and Standard & Poor’s. Remember not long after they lost all credibility by time and again pulling those green eye shades over their eyes, holding their noses and giving every subprime, no-document, securitized mortgage bond fund a rating of investment grade. Yep. Brought us to the brink, to the edge; and although there was some talk of “clipping their wings” in the halls of Congress, it is too late now. They are back and even more powerful. But this time they are singing a new tune. Despite cries of foul and fear their now conservative practices will cause another financial apocolypse, they will not stand down. Look at what they are doing in Europe; the credit rating agencies (“CRAs”) face intense international pressure over their “junk” ratings of Greek, Portuguese and Irish debt, yet they steadfastly refuse to back down.
Now they seem to have their sights on the U.S. Debt as they threaten to downgrade trillions of dollars in Treasury bonds to below AAA. Forget Congress, these are the guys to watch. They scare me, they are too powerful, and a little bit sinister. How can we trust their insistence on downgrading debt when just a couple of years ago they would have presumably graded a fistful of discarded “Powerball” tickets AAA. I’m not being paranoid, am I?
I say Congress should move forward with hearings before these CRAs push us once again to the brink, because I fear this time, we are going over the edge.