Senator Sanders calls for the ratings agencies to be nonprofit

Discussion in 'Economics' started by Sotnis, Jan 6, 2016.

  1. Cswim63

    Cswim63

    That sounds like code for them becoming a branch of government, where altruistic government workers could make better decisions, free from the corrupting demands of the capitalist system. Separately, Janet Yellow is busy fighting wage and price inflation, convinced that the forces driving down commodity prices are "transitory".
     
    #11     Jan 6, 2016
    speedo likes this.
  2. Cswim63

    Cswim63

    The funny thing is, you would think that they would know that the government stats are rigged. I mean, the unemployment rate isn't the real rate, but they can't figure out why the numbers say we have nearly full employment and little wage improvement. Duh.
     
    #12     Jan 6, 2016
  3. piezoe

    piezoe

    I really like this straight talking guy, Sanders. He doesn't talk down to me and insult me with slogans like "I'm going to make America Great Again", or play to my fears.. I have strong differences with him on some issues. When he talks, he makes more sense than any of the other candidates. I respect him. He is the only candidate that has convinced me that he can listen as well as talk.
     
    #13     Jan 7, 2016
  4. gkishot

    gkishot

    Non-profit rating agencies are as good as non-existent.
     
    #14     Jan 7, 2016
  5. Sig

    Sig

    Not sure what that even means?
     
    #15     Jan 7, 2016
  6. piezoe

    piezoe

    It is entirely within the realm of possibilities of course. You could have a government agency, like the SEC for example, that is funded by a fee placed on bond trades, and whose purpose is to rate debt instruments. http://www.sec.gov/news/pressrelease/2015-8.html

    You'd have to have very strong statutory safeguards against conflicts of interest and corruption. But any you had would likely be far more than the for profit rating industry has in place.

    Politically such a move could be wildly popular among the banking industry that would salivate over presumed lower rating fees and that would pocket the difference, or try to; but it might make the corporate and venture capital world nervous. Government debt, as we have seen, is already de facto rated by the international market, and foreign central banks. When S&P dropped its rating on U.S. Treasury bonds, it was front page news everywhere, but after the dust settled made not one wit of difference, because S&P does not determine the market for U.S. debt. That is determined by other factors, which the S&P hopes to mirror with their own government debt rating.

    It is important to note, perhaps, that the SEC is funded by appropriation rather than fees, but the fees it collects for the federal government have, typically, well exceeded its appropriation. In the meantime, the SEC may be somewhat underfunded. A cynical person might think this is how congress likes it to be, and conclude they don't want the SEC interfering with business profits by going after securities fraud anymore than they want the EPA, for example, to interfere with business profits. If you limit SEC funding, you limit the number of lawyers, and securities investigators they can hire!
     
    Last edited: Jan 8, 2016
    #16     Jan 8, 2016
  7. speedo

    speedo

    Great....now all you need is a government that isn't corrupt and incompetent.
     
    #17     Jan 8, 2016
  8. Cswim63

    Cswim63

    It would be great. Then any business that wanted to raise money would have to get their paperwork stamped by a bureaucrat. They would really have their tentacles in things, and be able to sell even more influence. I'm surprised this hasn't happened already.
     
    #18     Jan 8, 2016
  9. speedo

    speedo

    They're working on it.
     
    #19     Jan 8, 2016
  10. Cswim63

    Cswim63

    We must be genius-es. Yuk yuk. Hey, happy almost bear market!
     
    #20     Jan 8, 2016