Ratings Firms Also Blamed

I think rating agencies, perhaps consumer credit rating firms as well, are significantly responsible for Wall Street’s ability to create shadow bank packages without adequate numbers. I think the rating system of mutual funds is poor as well.

I’ll be watching for an overhaul and recommending it to political representatives. It may not be necessary to stiffen protocol or make better ratings more difficult, but to assure the rating is robust and real.

A very serious clue:

Sept. 24 (Bloomberg) — Frank Raiter says his former employer, Standard & Poor’s, placed a “For Sale” sign on its reputation on March 20, 2001. That day, a member of an S&P executive committee ordered him, the company’s top mortgage official, to grade a real estate investment he’d never reviewed.

It’s likely much, much worse. And across the board.