Senator Sanders calls for the ratings agencies to be nonprofit

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

  1. gkishot

    gkishot

    Do you hear yourself? Gates Foundation is build a-priory around a huge chunk of capital. So who will be the provider of capital to the rating agencies? Bernie Sanders or Bill Gates?
    Can you name at least one rating agency in existence that's based on altruism?
     
    #31     Jan 9, 2016
  2. Sig

    Sig

    OK, the employees duty is to the corporation, the corporations duty is to the shareholders, by transitive property the employees duty is to the shareholder. So no, there isn't a "big difference". But semantics aside, any way you look at it the fiduciary duty of a for-profit rating agency is not necessarily aligned with providing accurate credit reports, where it can be fully aligned with that goal for a non-profit.
     
    #32     Jan 9, 2016
  3. Cswim63

    Cswim63

    If it provides inaccurate credit reports, can it expect to stay in business?
     
    #33     Jan 9, 2016
  4. Sig

    Sig

    OK, take a look at Jake Harriman (http://www.nuruinternational.org/about-us/team/). Decorated Marine special forces, Stanford Graduate School of Business grad, non-profit employee. You're seriously going to tell me this guy's "mediocre"! That he isn't the "same quality of talent"? And most of his team I'd hire in a minute to work for me at my for-profit business. He happens to be one example of many like him that I know personally, and the world is full of more. Again, this idea that for-profit employees are somehow better than non-profit or government employees is both insulting and ignorant.
     
    #34     Jan 9, 2016
  5. Sig

    Sig

    Um, you were you around in 2008? They're all still in business. That pretty much answers the question.
     
    #35     Jan 9, 2016
  6. Cswim63

    Cswim63

    I'm not disagreeing with you on either point. My question is then why are they still in business. Maybe there's no alternative. I don't know enough about the business mechanism to go further. Does the market really pay attention to these ratings, or is it just a formality at this point?
     
    #36     Jan 9, 2016
  7. Cswim63

    Cswim63

    Why don't we just get rid of the ratings agencies and let people think for themselves?
     
    #37     Jan 9, 2016
    gkishot likes this.
  8. Cswim63

    Cswim63

    What happens to the theoretical non profit if they make a mistake? I mean a bad mistake. Like failing to uncover a fraud. Usually in these circumstances it is found upon investigation that an employee or two knew what was going on but was ignored repeatedly by management. Same as in the private sector.
     
    #38     Jan 9, 2016
  9. Cswim63

    Cswim63

    The problem for Bernie is no one woke up this morning and decided to start a non profit ratings agency.
     
    #39     Jan 9, 2016
  10. piezoe

    piezoe

    I think if you go back and read my prior post it will be clear to you where the source of funding for a non-profit rating agency lies. [see post#16, this same thread.] There would be little difficulty funding such an agency at minuscule cost relative to the size of the bond market.
     
    Last edited: Jan 11, 2016
    #40     Jan 11, 2016