Moody’s Defends Bank Rating Cuts – WSJ.com.
There is no reason for Moody’s to defend their bank rating cuts. Why? Because, in reality, Moody’s is becoming increasingly irrelevant.
The rating agency has never been a leader, an indicator, of what is to come or what is currently happening in the banking biz. It lags so far behind that if it were a fashion blogger, it would be telling us Hammer Pants are out of style, with no disrespect to MC Hammer or to his pants.
Remember, Moody’s was sued by unhappy issuers and investigation by the U.S. Department of Justice as well as criticized following the collapse of Enron, the U.S. subprime mortgage crisis and subsequent late 200s financial crisis. If you need Moody’s to tell you anything about the banks, etc…then you shouldn’t be in the financial business.
And lastly, there’s is Moody’s potential conflict-of-interest and it’s “issuer pays” model. But, we’ll leave that for another time. Hammer Time, perhaps?
