European socialists call for regulation of the ratings agencies

It beats me how they will ban the rating agencies from doing anything. The three main agencies are based in the US, the Constitution will protect their right to free speech. Any ratings they publish will be over the internet in 5secs (even if europeans are forbidden to know them officially!). The markets will pay heed to the ratings if it serves their purpose, otherwise not. This cry from the heart is really Canute telling the waves to retreat.

+++MEMO FROM EUROPEAN UNION CREDIT RATING AGENCY+++

Greece has a AAA Credit Rating

Greece has always had a AAA Credit Rating

+++MEMO ENDS+++

Quite.

So when times were good, and they gave AAA ratings to junk countries, are you going to insist that the lenders get extra interest payments from the likes of Greece?

Thought not.

I know. Lets shoot the messenger.

Remember too about the UK’s AAA rating. That rating is just about the bond holders getting a default over the next 10 years.

It says nothing about the pensioners getting a default, partial or full, on their pensions. It’s just another debt that the government owes.

Remember, if the pensions aren’t on the books, then the plan is not to pay them.

It’s a Ponzi.

Mind you, it does have some legs.

I think I’ll ask Labour to set me up as the only ratings agency. Nice bit of regulation stops all the competitors.

Then a few back handers, and governments can have the credit rating they want. After all, you’re worth it.

Fitch is majority owned by a french company- wonder if they will downgrade french debt?
So hardcore leftie IN EUROPE calls for a US company to not be allowed to sell research to another company in the US.
Why would left foot forward print that, it makes the left look stupid??

I agree that the credit ratings agencies need to be rewviewed as their track record is not very good aka the financial crisis. However part of me thinks that part of the problem is that for speculatros it is easier to bet against a country defaulting and so they will do whatever they can to encourage this.

This practice should be made illegal so as to stabalise the overall economic situation as short term betting for financial gain leads to large amounts of poverty and harship for millions of people, an example is how many people are now in fuel pverty because of higher energy costs brought about by the speculation on energy prices?

However some european countries do need to manage their debt problems also.

‘Most importantly, we can create a European Independent Credit Rating Agency, which would be the only one allowed to provide rating for regulatory purposes.’
Thus Mammon spoke…
So this guy wants to add another tool toi the arsenal of clowns

Party of European Socialists calls for regulation of the ratings agencies http://t.co/3DenwCJN via @leftfootfwd @PES_PSE

RT @leftfootfwd: European socialists call for regulation of the ratings agencies http://t.co/6iTOltAE

Party of European Socialists calls for regulation of the ratings agencies http://t.co/3DenwCJN via @leftfootfwd @PES_PSE

Regulation of credit rating agencies? http://t.co/JuIbbf7m Seems wrong & doomed to me.

Party of European Socialists calls for regulation of the ratings agencies http://t.co/3DenwCJN via @leftfootfwd @PES_PSE

European socialists call for regulation of the ratings agencies: http://t.co/qZQhURVu by @alexhern

European socialists call for regulation of the ratings agencies: http://t.co/qZQhURVu by @alexhern

Via @leftfootfwd: European socialists call for regulation of the free flow of information http://t.co/SbmkgRaG

RT @leftfootfwd: European socialists call for regulation of the ratings agencies and want findings hidden. http://t.co/Ft1tRewa

Via @leftfootfwd: European socialists call for regulation of the free flow of information http://t.co/SbmkgRaG

I agree that there have a notorious cases of speculators forcing consumers to pay up, but the most notable was enron, and it was an inside job- guys at the power stations were getting paid. This fallacy that speculators destabilise marhets forgets the important fact that the trade has to be correct to come off- if i keep selling £5 notes for 4.99, well i won’t change the value of a fiver…
Now lefties will auto jump to this guys defence- remember, your local council might invest in investments that this eurokok clown led rating agency determines a s safe on political grounds.
French debt and others that got downgraded were trading at levels that implied a LARGER downgrade for quite a while now-these agencies tend to follow, not lead (mostly).
Ring up a lawyer, ask him for his opinion and see how you get on suing him if he’s wrong…
CUCKOO!!
And finally, the euro clown said
‘A dozen anonymous analysists with no shred of legitimacy and a proven track record of gross inefficiency, effectively decided on Friday to make life much harder for millions of Europeans. This agency, like the others, is acting subjectively, politically and irresponsibly. This is an international scam that has to stop’
Now, replace analyst with politician and you’ve pretty much got the truth.

FITCH EXPECTS RATING REVISION OF 6 EURO ZONE STATES WILL END WITH DOWNGRADE OF 1-2 NOTCHES IN MOST COUNTRES – SENIOR FITCH ANALYST
Stangely, this French owned entity has said it’s unlikely it will downgrade France

Is it easy?

For example, if you and I have as bet on the Man Utd match this Saturday, does our bet affect the result?

After all, you’re betting one way, supporting Man Utd, and I’m betting the other way. It’s balanced.

So for every seller, there is a buyer.

The cause of the poverty and hardship isn’t the speculators, its governments. Governments who have run up massive debts, primarily to their own citizens, that they can’t pay.

As for fuel poverty, look to the Greens. If you force people to pay 800% more than the cost of electricity from other sources, its going to cause problems.

It’s just state cronyism, the real problem. Get the state to protect you so you don’t compete. (Greens) Get the state to bail you out (British Leyland to failed banks). Get tax perks like the film industry that aren’t offered to others. Steal directly like MPs and peers.

Where are the higher prices caused by speculation? Its higher prices because demand is up, or supply is down. Are you saying that the oil producers should be forced to sell below market cost? How are you going to make that happen? We have no more gunships to send in.

RT @leftfootfwd: European socialists call for regulation of the ratings agencies http://t.co/hPOvEEfp

If we look that after the financial crisis, the cost of things such as energy and food futures skyrocketed on the markets as investors pulled their money out of property and needed something secure to invest their money.
The other example wis when the war started in Libya fuel prices went up over 10%, considering it produces only 5% of the worlds oil supply what else could have caused the increase unless people were betting on the future price of oil going up.

Your analagy of the football teams I understand but what has happened in the markets is that someone needs to make money for their investor, they see a country is ok but see they can make money out of it so they start a rumour its rating is going to fall and so bet aginst it, people start to question why people are betting against it and hear the rumour and so they do the same thing, lenders hear and see this and think something dodgy must be going on so increase the level of interest they charge and so causes the problem.

Granted it is partially down to citizens being unable to pay that has caused poverty but you can not say that someone who decides to borrow shares in a company then drives down the share price to buy them at a cheaper price is not responsible either.

Libya. If you take the supply out from Libya and other countries affected by the Arab spring, that cuts supply. Demand doesn’t change. So up goes the price. The other producers (not speculators), just up the price. People like Chavaz. The problem isn’t ‘Libya’, its that the arab spring will spread.

There are no rumours. Greece is bust. It’s not fiction. So people want to hedge their risks, so they buy something that profits if it falls. To do that, they need someone who thinks the opposite. You want to make your case by drawing the boundary around the hedger, ignoring their other positions, ignoring the people that think otherwise and buy the country.

So if we take the shorting in shares example. What’s the responsibility of the person lending the shares, hoping to profit when the price goes up? After all you can’t have one without the other. You mistake is to try and exclude the other party from your case. You can’t. You need two to tango, and they form a system. That system is a zero sum game. One wins, one loses.

The problem with governments is that they have done what Bernie Maddoff did.

If you don’t report your debts, you can use new cashflows to pay off your debts, until the cash flows in aren’t sufficient. ie. Run a Ponzi.

Greece did do Enron style accounting, using Swaps to transform their deficit pushing it down.

I did mean both sides of the system are as bad as each other, yes we know Greece is bust, as earlier posted but I meant other economies which are fairly secure are being attacked and would be interesting to note how much is based on speculation.
I only mention Libya as yes the arab springhad already started but it had not affected trhe overall supply of oil, only when Libya reduce its supply did prices really skyrocket.

The other interesting example was the sale of Volkswagon where people betted against the companies share price but in that case got badly burnt bear in mind this was at the time when people were speculating car sales would collapse and so fed on it, that is part of the problem with the economy at the moment, people ae betting negatively which in some very rare cases get burnt but usually could have a knock on affect as lower share prices mean less investment which feeds through to jobs and growth.

Of course they would (call for regulation of the credit rating agencies). They don’t even recognize the irrelevance of them. The bottom line is that the credit rating agencies are unimportant. Not just because they’re incompetent, which they’ve repeatedly proven. But because they’re unnecessary. That is because the markets already set the credit worthiness of any borrower that has outstanding paper. The price is out there. The price of credit default swaps is out there. That is the ‘real’ credit rating of a sovereign or corporate borrower. Ratings are both redundant and dumber than the crowd-sourced price that already exists. I talk about the failure of the credit rating agencies in my book “Jackass Investing.” I’m pleased to provide readers with a complimentary link to the chapter in which they’re discussed (Myth #13: It’s Best to Follow Expert Advice): http://bit.ly/ugSnBf

Mike Dever
Author, Jackass Investing: Don’t do it. Profit from it.

Yes, I’m quite sure you’re all for monopolies and bribes. Typical of the right.

You’re making a major assumption that they are safe.

For example, the UK.

Government debts of 7,000 bn, and a deficit the same size as Greece (10.5%) UK (10.4%)

The UK is not safe.

For Volkswagen, yep, they were insider trading. Should they be banned?

Should Volkswagen be banned for naked selling as an example? It’s their standard practice.

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