''The Federal Reserve chairman, Ben S. Bernanke, warned on Wednesday of a “huge financial calamity” if President Obama and the Republicans cannot agree on a budget deal that allows the federal debt ceiling to be increased. Moody’s, the ratings agency, threatened a credit downgrade, citing a “rising possibility” that no deal would be reached before the government’s borrowing authority hits its limit on Aug. 2..''
''..Should Moody's be in the business of prospectively rating sovereign debt based on whether or not a government takes certain steps? Do they have the financial credibility and morality authority to do that? Should they be reacting to the current situation or should they be theorizing about a complex and variable collection of uncertainties in the future?
This is not an insignificant distinction. Moody's exists for a very simple reason: to provide dispassionate analysis -- resulting in a grade -- that allows potential investors to determine whether or not a particular debt instrument can be trusted, and through that, how it should be priced..'' Huffington Post
No comments:
Post a Comment