User:Nick Gardner /Sandbox

http://v3.moodys.com/researchandratings/methodology/003006001/rating-methodologies/methodology/003006001/4294966628/4294966848/0/0/-/0/rr Moodys rating methodologies

Failures

Enron November 2001 Orange County California, Mercury Finance, Pacific Gas & Electric, Enron, WorldCom, Delphi, General Motors and Ford.

A former Director of Moodys has attributed their conduct to a drive to retain market share in face of attempts by the major banks to play eacc agency off against the others - a tactic knows as ratings shopping

Fons, Jerome, 2008, “Rating Competition and Structured Finance”, Journal of Structured Finance, Fall 2008. http://www.glgroup.com/News/White-Paper-on-Rating-Competition-and-Structured-Finance-(Part-1)-23549.html

Statement by Lawrence J. White* for the “Roundtable to Examine Oversight of Credit Rating Agencies” U.S. Securities and Exchange Commission Washington, DC April 15, 2009 [1] (Statements about history)

[2] How and Why Credit Rating Agencies are Not Like Other Gatekeepers Frank Partnoy University of San Diego School of Law "Credit rating agencies are not widely respected among sophisticated market participants," Since 1973 credit ratings have been incorporated into hundreds of rules, releases, and regulatory decisions, in various substantive areas including securities, pension, banking, real estate, and insurance regulation

FINANCIAL GATEKEEPERS: CAN THEY PROTECT INVESTORS?, Yasuyuki Fuchita, Robert E. Litan, eds., Brookings Institution Press and the Nomura Institute of Capital Markets Research, 2006 San Diego Legal Studies Paper No. 07-46

The Paradox of Credit Ratings Frank Partnoy U San Diego Law & Econ Research Paper No. 20 [3] Numerous academic studies show that ratings changes lag the market and that the market anticipates ratings changes.3 The rejoinder to these studies – that ratings are correlated with actual default experience – is misplaced and inadequate, because ratings can be both correlated with default and have little informational value. Accordingly, such correlation proves nothing. Indeed, it would be surprising to find that ratings – regardless of their informational value – were not correlated with default

There are two superpowers in the world today in my opinion. There’s the

United States and there’s Moody’s Bond Rating Service. The United States can destroy you by dropping bombs, and Moody’s can destroy you by downgrading your bonds. And believe me, it's not clear sometimes who's more powerful. (Thomas L. Friedman, in an interview ith Jim Lehrer on Newshour, PBS television, Feb. 13, 1996).