How Moody's sold its ratings – and sold out investors
Kevin G. Hall
McClatchy Newspapers
October 21, 2009
A McClatchy investigation has found that Moody's punished executives who questioned why the company was risking its reputation by putting its profits ahead of providing trustworthy ratings for investment offerings.
. . . . . . .
“The story at Moody's doesn't start in 2007; it starts in 2000,” said Mark Froeba, a Harvard-educated lawyer and senior vice president who joined Moody's structured finance group in 1997.
A scheme to flood the market with counterfeit stocks helped kill Bear Stearns and Lehman Brothers — and the feds have yet to bust the culprits
MATT TAIBBIPosted Oct 14, 2009
What really happened to Bear and Lehman is that an economic drought temporarily left the hyenas without any more middle-class victims — and so they started eating each other, using the exact same schemes they had been using for years to fleece the rest of the country. And in the forensic footprint left by those kills, we can see for the first time exactly how the scam worked — and how completely even the government regulators who are supposed to protect us have given up trying to stop it.
This was a brokered bloodletting, one in which the power of the state was used to help effect a monstrous consolidation of financial and political power. Heading into 2008, there were five major investment banks in the United States: Bear, Lehman, Merrill Lynch, Morgan Stanley and Goldman Sachs. Today only Morgan Stanley and Goldman survive as independent firms, perched atop a restructured Wall Street hierarchy. And while the rest of the civilized world responded to last year's catastrophes with sweeping measures to rein in the corruption in their financial sectors, the United States invited the wolves into the government, with the popular new president, Barack Obama — elected amid promises to clean up the mess — filling his administration with Bear's and Lehman's conquerors, bestowing his papal blessing on a new era of robbery.
On the one-year anniversary of the Banksters blowing a hole in the global economy, no employee of a major American bank or financial institution is behind bars. Compare this to what happened after the Savings and Loan heist almost 20 years ago.
Take Action
No less than 1,852 S&L officials were prosecuted and 1,072 were jailed. Over 500 CEOs and top officers were indicted. What is going on here? Don't we believe in holding people accountable anymore? Tell the U.S. Department of Justice and the FBI to get cracking! Our motto? TOO BIG TO FAIL, BUT NOT TOO BIG TO GO TO JAIL!
Now this method of “business” is only possible if the government continues to allow these crooked insurance contracts to be written in secret, allows them to hold little or no money in reserve for payment and allows them to sell enough coverage on enough vital national assets that if there is a default — the taxpayer has no choice but to pay.
Considering the $23.7 trillion of taxpayer money being used to support these Corporate Communists one would hope they could at least make a few billion in profits with it. In context, making a few billion risking a few trillion is a rather pathetic return after all.
As we talked about last week – allowing these outdated banks to take control of our government and change the rules so they are protected from the natural competition and reward systems that have created so many innovations in our country, you not only steal from the citizens on behalf of the least worthy but you also doom them by trapping the capital that would have been used to generate new innovation and, most tangibly in our current situation, jobs.
The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.
For the last hundred years, rightsholders have fretted about everything from the player piano to the VCR to digital TV to Napster. Here are those objections, in Big Content's own words.
By Nate Anderson | Last updated October 11, 2009 10:00 PM CT
It's almost a truism in the tech world that copyright owners reflexively oppose new inventions that do (or might) disrupt existing business models. But how many techies actually know what rightsholders have said and written for the last hundred years on the subject?
STOCKHOLM – Americans Elinor Ostrom and Oliver Williamson won the Nobel economics prize on Monday for their work in economic governance.
Ostrom was the first woman to win the prize since it was founded in 1968, and the fifth woman to win a Nobel award this year — a Nobel record.
The Royal Swedish Academy of Sciences cited Ostrom “for her analysis of economic governance,” saying her work had demonstrated how common property can be successfully managed by groups using it.
Williamson, the academy said, developed a theory where business firms serve as structures for conflict resolution.
“Over the last three decades, these seminal contributions have advanced economic governance research from the fringe to the forefront of scientific attention,” the academy said.
The economics prize was the last Nobel award to be announced this year. It's not one of the original Nobel Prizes, but was created by the Swedish central bank in Alfred Nobel's memory.
Phi Beta Iota: The Nobel gang got this one right. What the media is not stating with enough emphasis is that she is a pioneer in collective governance of common resources. Below are direct links to some of her notable works.
