Employees at Moody’s are working overtime in release credit rating warnings and downgrades. After setting Europe aflame, they moved to the US. They might return to downgrade Spain and Italy. Soon. Isn’t it time for a summer vacation? They had long summer vacation in 2008. Some of the countries that are hurt are attacking the rating agencies as means of defense. They sound like children who can’t response to criticism and find something wrong with the other child that criticized them. But their attack on rating agencies is sometimes justified: A blast from the past Rewind to 2008, and actually 2007 and 2006: Companies in the financial sector such as Lehman Brothers for example, where performing “securitizations” of mortgages: wash, rinse,repeat. These Ã¼ber sophisticated financial instruments were then presented to rating agencies. In way too many cases, they were rubber stamped with a perfect Triple A rating. Other AA, A+, A were handed out like confetti. Some of them included very “toxic” assets – very unrealistic mortgages, to say the lease. It wasn’t only the CDOs. Also Lehman Brothers and AIG had high ratings just before the falls. Where were Moody’s, Fitch and S&P? Clinging on to Power The more important question is: how are they still in business? Or at least, how did this troika continue to have exclusivity on ratings? The excessive power that rating agencies have rightfully angers the Portuguese, the Greek and the Irish. All three countries are in junk status. Greece is still in trouble, sure. It may default. But Ireland is right on track. Portugal just began applying austerity measures, and vowed to make them stronger than anticipated. So why downgrade them now? It seems that Moody’s and also S&P and Fitch to a lesser extent, are overcompensating the dark past. Instead of making cold assessments, they are just throwing fuel to fire, being very “pro-cyclical” as Trichet says. In this case, the wheels are moving downhill quite fast. Contrary to European countries, silk gloves are used for the US. Here, no downgrades are made. Only hints to push the politicians into action. Moody’s has a helpful role in the US, but no so helpful in Europe. The significance of this help is doubted as well. It is common knowledge that the politicians in Washington will reach some kind of agreement at the last minute. That’s what happened with the government shutdown issue. Is Moody’s really helping there? So, I can surely understand Europeans with their antagonism towards the rating agencies, even if one of them is French owned: Fitch. Further reading: Europe needs a rate cut. Now. Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Expert score 5 Etoro - Best For Beginner & Experts0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 5 Read Review Open My Free Account Your capital is at risk. Opinions share Read Next USD/JPY: Trading the US Consumer Sentiment Yohay Elam 10 years Employees at Moody's are working overtime in release credit rating warnings and downgrades. After setting Europe aflame, they moved to the US. They might return to downgrade Spain and Italy. Soon. Isn't it time for a summer vacation? They had long summer vacation in 2008. Some of the countries that are hurt are attacking the rating agencies as means of defense. They sound like children who can't response to criticism and find something wrong with the other child that criticized them. But their attack on rating agencies is sometimes justified: A blast from the past Rewind to 2008, and actually… Top Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk.4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk.5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.