Saturday, 6 August 2011
Only $2 trillion out!
Is a strange world when the Chinese Communist party lectures the Americans that they need to run Capitalism better. Even the Philippines has its say on the failings of the Americans. Strange world in deed.
Some 30 years ago I recall the opprobrium that attached its self to organised Labour in the UK that they were running the country. Barely a week went by where the Daily Telegraph or Mail would trumpet who runs the country. Well it’s taken over a quarter of a century to resoundingly answer it seems that the credit agencies do. And not only that they probably had a hand in developing the crisis in the first place.
Moody's Corp and Standard and Poor's triggered the worst financial crisis in decades when they were forced to downgrade the inflated ratings they slapped on complex mortgage-backed securities, a U.S. congressional report concluded earlier this year.
In one of the most stark condemnations of the credit rating agencies, a Senate investigations panel said the agencies continued to give top ratings to mortgage-backed securities months after the housing market started to collapse.
The agencies then unleashed on the financial system a flood of downgrades in July 2007, the panel said.
``Perhaps more than any other single event, the sudden mass downgrades of (residential mortgage-backed securities) and (collateralized debt obligation) ratings were the immediate trigger for the financial crisis,'' the staff for Senators Carl Levin and Tom Coburn wrote in their report.
It also seems that the agency that down rated the triple AAA rating of the US economy according the Americans was $2 trillion out in their analysis of the state of the US economy.
If anyone rails against the trade union movement I shall ram the role of the undemocratic, unaccountable than I will ram this point down their throat