re: #413 lawhawk

Yes, Silver pretty much eviscerates the S&P’s methodologies and judgment on risk. Not only does he complain about their refusal to give full level downgrades when justified, but that it tends to follow rather than lead. They finally got around to issuing downgrades after it was all too apparent that the crisis in places like Ireland were underway.

I also agree with Silver that it’s likely that the S&P should have downgraded the US a while back; but that raises questions why the other agencies didn’t make that decision. That goes back to politics.

There was a good article over the weekend that discussed the oversized power that these agencies have in their ratings - the ratings have been incorporated by law and regulations into so much financial activity that to cleave them out of the process is all but impossible. Yet, we’re stuck with their approach however incorrect, misguided, lacking or incomplete it may be.

Then can they be induced to reform?