|
A billionaire explains the middle class
On 1/3/2015 11:00 PM, John B. Slocomb wrote:
I think that you are confusing "needs" and wants. Needs are food, clothing, lodging and medical care. And the Air force feed, clothed, and housed me and supplied free medical care when necessary, and demanded that I perform "work" in compensation. Which is, amazingly, just how communism worked in the so called "Eastern Block". If you were like many in the military, you did as little as possible to to get those needs supplied. Which is also much like the Eastern Block version communism: "They pretend to pay us, we pretend to work." David |
A billionaire explains the middle class
"David R. Birch" wrote in message
... On 1/3/2015 11:00 PM, John B. Slocomb wrote: I think that you are confusing "needs" and wants. Needs are food, clothing, lodging and medical care. And the Air force feed, clothed, and housed me and supplied free medical care when necessary, and demanded that I perform "work" in compensation. Which is, amazingly, just how communism worked in the so called "Eastern Block". If you were like many in the military, you did as little as possible to to get those needs supplied. Which is also much like the Eastern Block version communism: "They pretend to pay us, we pretend to work." David My situation was unusual, the on-call repairman for a computer network. I could only be assigned extra duties that I could drop on a moment's notice to hop on a helicopter, like post photographer and USO and chaplain's assistant, or helping in the motor pool. I was the obvious choice for odd assignments like meaningless special classes to show we were taking action against problems like drug abuse, and meet-the-locals visits around the area. I did enjoy being the token enlisted man at a banquet the officers held at Heidelberg Castle. I was almost the only enlisted GI who could be trusted to operate independently and not cause trouble out alone among the Germans. -jsw |
A billionaire explains the middle class
On 1/4/2015 8:50 AM, Jim Wilkins wrote:
"David R. Birch" wrote in message ... On 1/3/2015 11:00 PM, John B. Slocomb wrote: I think that you are confusing "needs" and wants. Needs are food, clothing, lodging and medical care. And the Air force feed, clothed, and housed me and supplied free medical care when necessary, and demanded that I perform "work" in compensation. Which is, amazingly, just how communism worked in the so called "Eastern Block". If you were like many in the military, you did as little as possible to to get those needs supplied. Which is also much like the Eastern Block version communism: "They pretend to pay us, we pretend to work." David My situation was unusual, the on-call repairman for a computer network. I could only be assigned extra duties that I could drop on a moment's notice to hop on a helicopter, like post photographer and USO and chaplain's assistant, or helping in the motor pool. I was the obvious choice for odd assignments like meaningless special classes to show we were taking action against problems like drug abuse, and meet-the-locals visits around the area. I did enjoy being the token enlisted man at a banquet the officers held at Heidelberg Castle. I was almost the only enlisted GI who could be trusted to operate independently and not cause trouble out alone among the Germans. -jsw When were you there? My brother was a JAG captain who said he spent most of his time defending enlisted men for drug abuse or fighting with the locals. That was in the mid '70's. I visited him in '75 and ended up visiting the Heidelberg Schloß four times! The exploded gunpowder donjon was impressive. http://www.panoramio.com/photo/5685814 David |
A billionaire explains the middle class
On Sat, 03 Jan 2015 12:49:57 -0800, mike
wrote: snip Anything that rakes in money without also producing something or transporting something or facilitating something is not an investment. /snip An example of this in action at the most basic level. http://tinyurl.com/q5zvjhz A title loan sounds like a lifeline for someone who needs quick cash, but these financial institutions are charging exorbitant interest rates, ranging from 80 percent to 500 percent per year. snip “For many borrowers, title loans, also sometimes known as motor-vehicle equity lines of credit or title pawns, are having ruinous financial consequences, causing owners to lose their vehicles and plunging them further into debt,” according to the Times. snip The Gazette article cited data from the Center for Responsible Lending, in Durham, North Carolina, that showed one in six of the loans ends in repossession of the vehicle. snip -- Unka' George "Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants, but debt is the money of slaves" -Norm Franz, "Money and Wealth in the New Millenium" |
A billionaire explains the middle class
"David R. Birch" wrote in message ... On 1/4/2015 8:50 AM, Jim Wilkins wrote: "David R. Birch" wrote in message ... On 1/3/2015 11:00 PM, John B. Slocomb wrote: I think that you are confusing "needs" and wants. Needs are food, clothing, lodging and medical care. And the Air force feed, clothed, and housed me and supplied free medical care when necessary, and demanded that I perform "work" in compensation. Which is, amazingly, just how communism worked in the so called "Eastern Block". If you were like many in the military, you did as little as possible to to get those needs supplied. Which is also much like the Eastern Block version communism: "They pretend to pay us, we pretend to work." David My situation was unusual, the on-call repairman for a computer network. I could only be assigned extra duties that I could drop on a moment's notice to hop on a helicopter, like post photographer and USO and chaplain's assistant, or helping in the motor pool. I was the obvious choice for odd assignments like meaningless special classes to show we were taking action against problems like drug abuse, and meet-the-locals visits around the area. I did enjoy being the token enlisted man at a banquet the officers held at Heidelberg Castle. I was almost the only enlisted GI who could be trusted to operate independently and not cause trouble out alone among the Germans. -jsw When were you there? My brother was a JAG captain who said he spent most of his time defending enlisted men for drug abuse or fighting with the locals. That was in the mid '70's. I visited him in '75 and ended up visiting the Heidelberg Schloß four times! The exploded gunpowder donjon was impressive. http://www.panoramio.com/photo/5685814 David I left in early 1973. The drug situation I saw in Germany then was strange. It was mostly "ethnic", and severely aggravated by ambitious congressional staffers etc who tried to inflate any criminal accusation into a racial incident. The first response I saw was to dump enforcement onto black NCOs, then to simply ignore the problem and relax discipline. Barracks inspections stopped so the officers wouldn't have to see but ignore the punchbowls full of hash. The effect of uncontrolled drug use was surprisingly small. It lost its cachet of rebellion and fell back to the habitual users who hadn't been contributing anything anyway, so the usual 10-20% who make everything run smoothly just continued to, and life proceeded as before without major problems other than unmourned drug-dealer murders. We knew not to assign any tasks to a guy who carried his heroin works in his shirt pocket. After they introduced beer vending machines, I noticed that the milk machines always ran out first. The "Drug Education" class I was stuckee'd to attend was part of a grad student's thesis project on the effects of various substances on blood circulation, with films of red cells moving (or not) in the transparent capillaries of frog feet. Somehow he had sold the Army on its value and gotten them to fund his European vacation trip. He was very surprised to find a GI who knew chemistry better than he did among the class of sleepy people who could be spared to attend. He happened to be holding it next to an old airstrip we often used so I was as available for a mission there as anywhere else. -jsw |
A billionaire explains the middle class
On Wednesday, December 31, 2014 9:24:29 AM UTC-8, Larry Jaques wrote:*
On Tue, 30 Dec 2014 11:15:38 -0800, mike wrote:* * On 12/30/2014 6:41 *wrote:* * "Few economists saw our current crisis coming,* * Understanding economy may not matter. *Might be as simple as the* aftermath of some terrorist act.* * Merry Christmas to all and to all a zzzzzzzzzzzzzzzzzzzzzzzzzz* * Same to ya, but I had a rotten Christmas. *Too much trouble with the gf.* ;(* * It's been said that, if you can make a fist, a gf is superfluous.* If you can't make a fist, that's probably the least of the things you* can't make and the gf is still superfluous.* High five...other hand please.* *;-)* * He needs to maintain his open hand in order to repeatedly slap himself* on the forehead at his own stupidity, mike. *As to the other hand, who* knows where that thumb has been...* Gee, Larry normally is the happy drunk and clueless comedian. I finally see he gets all hostile and Lashes out just because somebody mentions what their lady friend says. (he must have had a mighty rotten holiday season this time around) |
A billionaire explains the middle class
"F. George McDuffee" wrote in
message ... On Sat, 03 Jan 2015 12:49:57 -0800, mike wrote: snip Anything that rakes in money without also producing something or transporting something or facilitating something is not an investment. /snip An example of this in action at the most basic level. http://tinyurl.com/q5zvjhz A title loan sounds like a lifeline for someone who needs quick cash, but these financial institutions are charging exorbitant interest rates, ranging from 80 percent to 500 percent per year. snip "For many borrowers, title loans, also sometimes known as motor-vehicle equity lines of credit or title pawns, are having ruinous financial consequences, causing owners to lose their vehicles and plunging them further into debt," according to the Times. snip The Gazette article cited data from the Center for Responsible Lending, in Durham, North Carolina, that showed one in six of the loans ends in repossession of the vehicle. snip -- Unka' George We need a public institution kids will be forced to attend that teaches them to be responsible adults. |
A billionaire explains the middle class
F. George McDuffee wrote:
On Sat, 03 Jan 2015 12:49:57 -0800, mike wrote: snip Anything that rakes in money without also producing something or transporting something or facilitating something is not an investment. /snip An example of this in action at the most basic level. http://tinyurl.com/q5zvjhz Those title loans are funded by Asset Backed Securities. And next you will be telling us how those investors that are funding that activity are innocent little babes that are getting ripped off. |
A billionaire explains the middle class
"Jim Wilkins" wrote in message ... We need a public institution kids will be forced to attend that teaches them to be responsible adults. That would be considered child abuse. Best Regards Tom. |
A billionaire explains the middle class
On Sun, 4 Jan 2015 12:45:51 -0800, "Howard Beal"
wrote: "Jim Wilkins" wrote in message ... We need a public institution kids will be forced to attend that teaches them to be responsible adults. That would be considered child abuse. Best Regards Tom. Not if you wait untill they are 18. |
A billionaire explains the middle class
On Sun, 4 Jan 2015 05:07:14 -0800 (PST), "
wrote: On Sunday, January 4, 2015 12:10:03 AM UTC-5, John B. Slocomb wrote: But the publicly listed companies file 10-K report that are public information and they are required to make share holders aware of significant plans for the company. -- Cheers, John B. That is true, but the 10k report has a lot of qualifying statements. Dan True, but as a lawyer friend put it, "they are probably the most that the company will willing divulge". -- Cheers, John B. |
A billionaire explains the middle class
On Sun, 04 Jan 2015 08:16:36 -0600, "David R. Birch"
wrote: On 1/3/2015 11:00 PM, John B. Slocomb wrote: I think that you are confusing "needs" and wants. Needs are food, clothing, lodging and medical care. And the Air force feed, clothed, and housed me and supplied free medical care when necessary, and demanded that I perform "work" in compensation. Which is, amazingly, just how communism worked in the so called "Eastern Block". If you were like many in the military, you did as little as possible to to get those needs supplied. Not really. Or at least I don't remember it that way. Generally you were given a job and you worked until you finished it and then, if it was an airplane, somebody came by to make sure you did it correctly. Which is also much like the Eastern Block version communism: "They pretend to pay us, we pretend to work." David That is specifically a Russian joke and to what extent it was applicable to all communist countries I have no idea, but I have a good friend that grew up in Hungary and he said that when he went to collage, under the communists, that if you didn't get grades of a certain level that you were dropped from school, so apparently success was demanded in some fields. -- Cheers, John B. |
A billionaire explains the middle class
wrote in message
... On Sun, 4 Jan 2015 12:45:51 -0800, "Howard Beal" wrote: "Jim Wilkins" wrote in message ... We need a public institution kids will be forced to attend that teaches them to be responsible adults. That would be considered child abuse. Best Regards Tom. Not if you wait untill they are 18. Then they will remain children for life. Perhaps the law could recognize that and on sufficient evidence declare then legally under age. |
A billionaire explains the middle class
On Monday, January 5, 2015 7:27:21 AM UTC-5, Jim Wilkins wrote:
wrote in message ... On Sun, 4 Jan 2015 12:45:51 -0800, "Howard Beal" wrote: "Jim Wilkins" wrote in message ... We need a public institution kids will be forced to attend that teaches them to be responsible adults. That would be considered child abuse. Best Regards Tom. Not if you wait untill they are 18. Then they will remain children for life. Most adults seem childish anyway, though. I don't believe I know of anyone who was "forced to grow up at an early age". Everyone was babied, spoiled heavily with "video games and MTV" and pampered, so that by the time they were 18, they were all still mental 5 year olds. Almost everyone I know is like that. Even right here on this ng. Haven't you noticed that? Western civilization isn't like they are in Somalia where they are forced to be a man or a child soldier at the earliest stages in life, where they face a footrace to a funeral even to try to find simple clothing to wear, let alone to find food/shelter. |
A billionaire explains the middle class
On Mon, 5 Jan 2015 07:27:17 -0500, "Jim Wilkins"
wrote: wrote in message .. . On Sun, 4 Jan 2015 12:45:51 -0800, "Howard Beal" wrote: "Jim Wilkins" wrote in message ... We need a public institution kids will be forced to attend that teaches them to be responsible adults. That would be considered child abuse. Best Regards Tom. Not if you wait untill they are 18. Then they will remain children for life. Perhaps the law could recognize that and on sufficient evidence declare then legally under age. Then they could immediately register as Democrats "At the core of liberalism is the spoiled child, miserable, as all spoiled children are, unsatisfied, demanding, ill-disciplined, despotic and useless. Liberalism is a philosophy of sniveling brats." PJ O'Rourke |
A billionaire explains the middle class
On Mon, 5 Jan 2015 07:27:17 -0500, "Jim Wilkins"
wrote: wrote in message .. . On Sun, 4 Jan 2015 12:45:51 -0800, "Howard Beal" wrote: "Jim Wilkins" wrote in message ... We need a public institution kids will be forced to attend that teaches them to be responsible adults. That would be considered child abuse. Best Regards Tom. Not if you wait untill they are 18. Then they will remain children for life. Perhaps the law could recognize that and on sufficient evidence declare then legally under age. Yeah, then they could share their criminal knowledge with the rest of Juvi inmates. Or, if they weren't criminals, at least that'd keep them from voting. Every little bit helps. I'd just as soon stop trying to rehabilitate the unrehabilitatable wastes of oxygen. Help the fixable, compost the rest. Warehousing is far too costly for a zero return. Alas, so are the legal costs to prosecute to death penalty. Sumpin' needs a fixin'. -- I’ve long been passionate about protecting and expanding democracy, which is really the only viable mechanism to preserve liberty and distribute power from kings to the rest of us. --George Farah |
A billionaire explains the middle class
On Mon, 05 Jan 2015 06:35:39 -0800, Larry Jaques
wrote: On Mon, 5 Jan 2015 07:27:17 -0500, "Jim Wilkins" wrote: wrote in message . .. On Sun, 4 Jan 2015 12:45:51 -0800, "Howard Beal" wrote: "Jim Wilkins" wrote in message ... We need a public institution kids will be forced to attend that teaches them to be responsible adults. That would be considered child abuse. Best Regards Tom. Not if you wait untill they are 18. Then they will remain children for life. Perhaps the law could recognize that and on sufficient evidence declare then legally under age. Yeah, then they could share their criminal knowledge with the rest of Juvi inmates. Or, if they weren't criminals, at least that'd keep them from voting. Every little bit helps. I'd just as soon stop trying to rehabilitate the unrehabilitatable wastes of oxygen. Help the fixable, compost the rest. Warehousing is far too costly for a zero return. Alas, so are the legal costs to prosecute to death penalty. Sumpin' needs a fixin'. Legal costs? Not if the Great Cull happens. And a 22 round to the back fo the skull is far cheaper than even the replacement costs of all that roadside barbed wire used to hang many/most of them. "At the core of liberalism is the spoiled child, miserable, as all spoiled children are, unsatisfied, demanding, ill-disciplined, despotic and useless. Liberalism is a philosophy of sniveling brats." PJ O'Rourke |
A billionaire explains the middle class
On Monday, January 5, 2015 3:34:21 AM UTC-5, John B. Slocomb wrote:
On Sun, 4 Jan 2015 05:07:14 -0800 (PST), " wrote: On Sunday, January 4, 2015 12:10:03 AM UTC-5, John B. Slocomb wrote: But the publicly listed companies file 10-K report that are public information and they are required to make share holders aware of significant plans for the company. -- Cheers, John B. That is true, but the 10k report has a lot of qualifying statements. True, but as a lawyer friend put it, "they are probably the most that the company will willing divulge". And here's an example of what happens when it doesn't divulge truthfully enough to those investing with it: ... "F-Squared Investments Inc., which builds investment portfolios out of exchange-traded funds, admitted it misled clients about its track record and agreed to pay $35 million in a settlement with regulators. -- http://www.wsj.com/articles/f-square...ges-1419268778 (of course, at this socio-economic level crime and punishment is settled a bit differently) |
A billionaire explains the middle class
"Larry Jaques" wrote in message
... On Mon, 5 Jan 2015 07:27:17 -0500, "Jim Wilkins" wrote: wrote in message . .. On Sun, 4 Jan 2015 12:45:51 -0800, "Howard Beal" wrote: "Jim Wilkins" wrote in message ... We need a public institution kids will be forced to attend that teaches them to be responsible adults. That would be considered child abuse. Best Regards Tom. Not if you wait untill they are 18. Then they will remain children for life. Perhaps the law could recognize that and on sufficient evidence declare then legally under age. Yeah, then they could share their criminal knowledge with the rest of Juvi inmates. Or, if they weren't criminals, at least that'd keep them from voting. Every little bit helps. I'd just as soon stop trying to rehabilitate the unrehabilitatable wastes of oxygen. Help the fixable, compost the rest. Warehousing is far too costly for a zero return. Alas, so are the legal costs to prosecute to death penalty. Sumpin' needs a fixin'. The traditional answer has been to provoke a low-risk war that consumes the excess of unruly males, and subsequently keeps the less desirable females from finding mates. |
A billionaire explains the middle class
F. George McDuffee wrote:
Why is there no government mandated "crash test" of financial products? Why no evaluation of their safety and efficacy comparable to FDA drug screening? There are supposedly tests on how long banks can stand during tough times. I think the current term they use is called a "stress test" as required by various central banks. |
A billionaire explains the middle class
Gunner Asch on Mon, 05 Jan 2015 06:18:11 -0800
typed in rec.crafts.metalworking the following: On Mon, 5 Jan 2015 07:27:17 -0500, "Jim Wilkins" wrote: wrote: On Sun, 4 Jan 2015 12:45:51 -0800, "Howard Beal" wrote: "Jim Wilkins" wrote: We need a public institution kids will be forced to attend that teaches them to be responsible adults. That would be considered child abuse. Not if you wait untill they are 18. Then they will remain children for life. Perhaps the law could recognize that and on sufficient evidence declare then legally under age. Then they could immediately register as Democrats Me thinks you meant "They could immediately _be_ registered as Democrats." I mean, they're not really up to make such important decisions on their own, are they? -- pyotr filipivich "With Age comes Wisdom. Although more often, Age travels alone." |
A billionaire explains the middle class
|
A billionaire explains the middle class
On Mon, 05 Jan 2015 10:43:29 -0800, pyotr filipivich
wrote: Gunner Asch on Mon, 05 Jan 2015 06:18:11 -0800 typed in rec.crafts.metalworking the following: On Mon, 5 Jan 2015 07:27:17 -0500, "Jim Wilkins" wrote: wrote: On Sun, 4 Jan 2015 12:45:51 -0800, "Howard Beal" wrote: "Jim Wilkins" wrote: We need a public institution kids will be forced to attend that teaches them to be responsible adults. That would be considered child abuse. Not if you wait untill they are 18. Then they will remain children for life. Perhaps the law could recognize that and on sufficient evidence declare then legally under age. Then they could immediately register as Democrats Me thinks you meant "They could immediately _be_ registered as Democrats." I mean, they're not really up to make such important decisions on their own, are they? -- pyotr filipivich "With Age comes Wisdom. Although more often, Age travels alone." True indeed!!! Thank YOU for the accurate and timely correction!! Gunner, bowing to a very smart fellow. "At the core of liberalism is the spoiled child, miserable, as all spoiled children are, unsatisfied, demanding, ill-disciplined, despotic and useless. Liberalism is a philosophy of sniveling brats." PJ O'Rourke |
A billionaire explains the middle class
On Mon, 05 Jan 2015 11:25:06 -0800, Gunner Asch
wrote: On Mon, 05 Jan 2015 10:43:29 -0800, pyotr filipivich wrote: Gunner Asch on Mon, 05 Jan 2015 06:18:11 -0800 typed in rec.crafts.metalworking the following: On Mon, 5 Jan 2015 07:27:17 -0500, "Jim Wilkins" wrote: wrote: On Sun, 4 Jan 2015 12:45:51 -0800, "Howard Beal" wrote: "Jim Wilkins" wrote: We need a public institution kids will be forced to attend that teaches them to be responsible adults. That would be considered child abuse. Not if you wait untill they are 18. Then they will remain children for life. Perhaps the law could recognize that and on sufficient evidence declare then legally under age. Then they could immediately register as Democrats Me thinks you meant "They could immediately _be_ registered as Democrats." I mean, they're not really up to make such important decisions on their own, are they? -- pyotr filipivich "With Age comes Wisdom. Although more often, Age travels alone." True indeed!!! Thank YOU for the accurate and timely correction!! Gunner, bowing to a very smart fellow. So what happened to you, that you went uninsured and wound up saddling the rest of us with your $200,000+ set of medical bills? Remember, from your own words, you weren't a Democrat then. d8-) -- Ed Huntress |
A billionaire explains the middle class
On Mon, 05 Jan 2015 06:44:23 -0800, Gunner Asch
wrote: On Mon, 05 Jan 2015 06:35:39 -0800, Larry Jaques wrote: On Mon, 5 Jan 2015 07:27:17 -0500, "Jim Wilkins" wrote: wrote in message ... On Sun, 4 Jan 2015 12:45:51 -0800, "Howard Beal" wrote: "Jim Wilkins" wrote in message ... We need a public institution kids will be forced to attend that teaches them to be responsible adults. That would be considered child abuse. Best Regards Tom. Not if you wait untill they are 18. Then they will remain children for life. Perhaps the law could recognize that and on sufficient evidence declare then legally under age. Yeah, then they could share their criminal knowledge with the rest of Juvi inmates. Or, if they weren't criminals, at least that'd keep them from voting. Every little bit helps. I'd just as soon stop trying to rehabilitate the unrehabilitatable wastes of oxygen. Help the fixable, compost the rest. Warehousing is far too costly for a zero return. Alas, so are the legal costs to prosecute to death penalty. Sumpin' needs a fixin'. Legal costs? Not if the Great Cull happens. I was referring to today's costs. GC is much more cost-effective. And a 22 round to the back fo the skull is far cheaper than even the replacement costs of all that roadside barbed wire used to hang many/most of them. Don't forget to amortize the cost of that wire. It's multiple-use. -- I’ve long been passionate about protecting and expanding democracy, which is really the only viable mechanism to preserve liberty and distribute power from kings to the rest of us. --George Farah |
A billionaire explains the middle class
On Monday, January 5, 2015 2:07:38 PM UTC-5, wrote:
wrote: F. George McDuffee wrote: Why is there no government mandated "crash test" of financial products? Why no evaluation of their safety and efficacy comparable to FDA drug screening? There are supposedly tests on how long banks can stand It wasn't bank deposit money that was funding the flaky financial products. It depends upon what type of bank and which budget their charters allow their executives to have and even raid. They have deposit set-asides, bonus set-asides, interest budgets, P&L budgets, loan budgets, bitcoin budgets, branch expense budgets. Even more types if they are an investment bank. Stress testing banks doesn't address the question. But what do top specialists in the field say? "The U.S. stress tests succeeded because they forced banks to raise a lot of capital," says Anil Kashyap, an economist at the University of Chicago's Booth School of Business ..." -- http://www.wsj.com/news/articles/SB1...g=ren o64-wsj |
A billionaire explains the middle class
wrote:
On Monday, January 5, 2015 2:07:38 PM UTC-5, wrote: wrote: F. George McDuffee wrote: Why is there no government mandated "crash test" of financial products? Why no evaluation of their safety and efficacy comparable to FDA drug screening? There are supposedly tests on how long banks can stand It wasn't bank deposit money that was funding the flaky financial products. It depends upon what type of bank No it doesn't depend on the type of bank. Only the type that take deposits are allowed to use deposit money to fund investments. And since the govt is on the hook if a deposit taking facility fails there are regulations that make sure that the money is not used recklessly. The money that funded the reckless lending during the housing bubble came from private investors. And most of the reckless loans originated with non-bank mortgage lenders like CountryWide and AmeriQuest. Stress testing banks doesn't address the question. But what do top specialists in the field say? What they may say doesn't addresses the question. Stress testing banks doesn't address the question of of safety and soundness of financial products that are funded by private investor's money. |
A billionaire explains the middle class
Larry Jaques wrote: Yeah, then they could share their criminal knowledge with the rest of Juvi inmates. Or, if they weren't criminals, at least that'd keep them from voting. Every little bit helps. I'd just as soon stop trying to rehabilitate the unrehabilitatable wastes of oxygen. Help the fixable, compost the rest. Warehousing is far too costly for a zero return. Alas, so are the legal costs to prosecute to death penalty. Sumpin' needs a fixin'. Send them hunting with Dick Cheny, and tell him that they are lawyers? -- Anyone wanting to run for any political office in the US should have to have a DD214, and a honorable discharge. |
A billionaire explains the middle class
On Tuesday, January 6, 2015 12:01:16 PM UTC-5, wrote:
wrote: On Monday, January 5, 2015 2:07:38 PM UTC-5, wrote: wrote: F. George McDuffee wrote: Why is there no government mandated "crash test" of financial products? Why no evaluation of their safety and efficacy comparable to FDA drug screening? There are supposedly tests on how long banks can stand It wasn't bank deposit money that was funding the flaky financial products. It depends upon what type of bank No it doesn't depend on the type of bank. Yes it does. (for example a community bank as opposed to an investment bank (as I said) Only the type that take deposits are allowed to use deposit money to fund investments. Banks have routinely borrowed to conduct investment procedures: "New York Community Bancorp Inc. soared nearly 6% on Wednesday after an analyst said its pending purchase of two commercial banks will make it more profitable. Citigroup analyst Michael Diana raised his rating on the Westbury, L.I.-based bank, which has been unloved on Wall Street since it made a bad bet on interest rates last year. The bank borrowed to invest in mortgage-backed securities, which squeezed corporate profits when short-term rates rose." -- http://www.crainsnewyork.com/article...-up-on-mergers And since the govt is on the hook if a deposit taking facility fails It wasn't there for Lehman Brothers. there are regulations that make sure that the money is not used recklessly. Regulations are never 100%. The money that funded the reckless lending during the housing bubble came from private investors. As well as from companies, corporations and non-private sources such as non-profit institutions and governments and. For example, the government of Orange County famously lost money due to derivatives based investment. |
A billionaire explains the middle class
On Sat, 03 Jan 2015 11:40:26 -0600, F George McDuffee wrote:
[...] IMNSHO it is unreasonable to expect the average, or indeed professional, investor to conduct in-depth due dillagance on every investment they make, to verify/validate the rating organization valuations http://tinyurl.com/oxhw2ah. Indeed, in many cases the securities broker/financial advisor was the advisor who suggested an investment in ABS [asset backed securities -- CDOs], CDS [credit default swaps] or interest rate swaps, based on *THEIR* understanding AT THE TIME. Which sort of begs the question, "Who will rate the ratings agencies?" Is there some sort of qualifying exam for becoming a Recognized Ratings Organization? Jes' curious... Frank McKenney -- Where all are guilty, no one is; confessions of collective guilt are the best possible safeguard against the discovery of culprits, and the very magnitude of the crime the best excuse for doing nothing. -- Hannah Arendt -- Frank McKenney, McKenney Associates Richmond, Virginia / (804) 320-4887 Munged E-mail: frank uscore mckenney aatt mindspring ddoott com |
A billionaire explains the middle class
On Wed, 07 Jan 2015 10:10:03 -0600, Frnak McKenney
wrote: On Sat, 03 Jan 2015 11:40:26 -0600, F George McDuffee wrote: [...] IMNSHO it is unreasonable to expect the average, or indeed professional, investor to conduct in-depth due dillagance on every investment they make, to verify/validate the rating organization valuations http://tinyurl.com/oxhw2ah. Indeed, in many cases the securities broker/financial advisor was the advisor who suggested an investment in ABS [asset backed securities -- CDOs], CDS [credit default swaps] or interest rate swaps, based on *THEIR* understanding AT THE TIME. Which sort of begs the question, "Who will rate the ratings agencies?" Is there some sort of qualifying exam for becoming a Recognized Ratings Organization? Jes' curious... Frank McKenney It's more like having a proven track record for skill and integrity -- which the major agencies sacrificed when they started consulting to the same institutions they were rating. That was stupid, and bound to destoy their credibility. -- Ed Huntress |
A billionaire explains the middle class
On Wed, 07 Jan 2015 10:10:03 -0600, Frnak McKenney
wrote: On Sat, 03 Jan 2015 11:40:26 -0600, F George McDuffee wrote: [...] IMNSHO it is unreasonable to expect the average, or indeed professional, investor to conduct in-depth due dillagance on every investment they make, to verify/validate the rating organization valuations http://tinyurl.com/oxhw2ah. Indeed, in many cases the securities broker/financial advisor was the advisor who suggested an investment in ABS [asset backed securities -- CDOs], CDS [credit default swaps] or interest rate swaps, based on *THEIR* understanding AT THE TIME. Which sort of begs the question, "Who will rate the ratings agencies?" Is there some sort of qualifying exam for becoming a Recognized Ratings Organization? Jes' curious... Frank McKenney -- http://tinyurl.com/2e7b5hs snip "Credit rating is a highly concentrated industry, with the two largest CRAs—Moody's Investors Service and Standard & Poor's (S&P)—controlling 80% of the global market share, and the "Big Three" credit rating agencies—Moody's, S&P, and Fitch Ratings—controlling approximately 95% of the ratings business." /snip http://tinyurl.com/3h6ymd7 snip "Originally, the SEC did not adopt specific standards for determining which credit rating agencies were "nationally recognized", and instead addressed the question on a case-by-case basis.[23] NRSRO recognition was granted by the SEC through a "No Action Letter" sent by the SEC staff. Under this approach, if a CRA (or investment bank or broker-dealer) were interested in using the ratings from a particular CRA for regulatory purposes, the SEC staff would research the market to determine whether ratings from that particular CRA are widely used and considered "reliable and credible." If the SEC staff determined that this was the case, it would send a letter to the CRA indicating that if a regulated entity were to rely on the CRA's ratings, the SEC staff would not recommend enforcement action against that entity. These "No Action Letters" were made public and could be relied upon by other regulated entities, not just the entity making the original request. The SEC later sought to further define the criteria it uses when making this assessment, and in March 2005 published a proposed regulation to this effect. According to the SEC:[23] The single most important factor in the Commission staff’s assessment of NRSRO status is whether the rating agency is “nationally recognized” in the United States as an issuer of credible and reliable ratings by the predominant users of securities ratings. The staff also reviews the operational capability and reliability of each rating organization. Included within this assessment a (1) the organizational structure of the rating organization; (2) the rating organization’s financial resources (to determine, among other things, whether it is able to operate independently of economic pressures or control from the companies it rates); (3) the size and quality of the rating organization’s staff (to determine if the entity is capable of thoroughly and competently evaluating an issuer’s credit); (4) the rating organization’s independence from the companies it rates; (5) the rating organization’s rating procedures (to determine whether it has systematic procedures designed to produce credible and accurate ratings); and (6) whether the rating organization has internal procedures to prevent the misuse of nonpublic information and whether those procedures are followed. The staff also recommends that the agency become registered as an investment adviser." /snip One of the greatest weaknesses appears to be the lack of any publically available results, e. g. 10% of the bonds with a AAA rating from the Humperdink Rating Agency within 5 years of issuance, while only 1% of the bonds rated AAA by the Smith Agency were. FWIW: Item(5) above appears to be the weak link as the NRSROs will not divulge their ratings methodology, so it is impossible to evaluate their appropriateness in today's markets. From the results and anecdotes, it appears this is a highly subjective and idiosyncratic process, being more a matter of taste or esthetics than facts. There is at least one non-NRSRO maverick credit rating agency that uses the 10k and other publically available objective/numerical data as input to a computer program that calculates various ratios, and using the historical data from a large number of industries/companies, calculates the likelyhood of default. Their results appear to be much more accurate, and as this is a "mechanical" process, if the same data is input the same rating results, no matter who does it. -- Unka' George "Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants, but debt is the money of slaves" -Norm Franz, "Money and Wealth in the New Millenium" |
A billionaire explains the middle class
On Wed, 07 Jan 2015 10:10:03 -0600, Frnak McKenney*
wrote:* On Sat, 03 Jan 2015 11:40:26 -0600, F *George McDuffee wrote:* * *[...]* * IMNSHO it is unreasonable to expect the average, or indeed* professional, investor to conduct in-depth due dillagance on* every investment they make, to verify/validate the rating* organization valuations*http://tinyurl.com/oxhw2ah. *Indeed,* in many cases the securities broker/financial advisor was* the advisor who suggested an investment in ABS [asset backed* securities -- CDOs], CDS [credit default swaps] or interest* rate swaps, based on *THEIR* understanding AT THE TIME.* * Which sort of begs the question, "Who will rate the ratings agencies?"* * Is there some sort of qualifying exam for becoming a Recognized Ratings* Organization?* * Jes' curious...* I imagine that the mainstream news media can do what's necessary. |
A billionaire explains the middle class
On Thursday, December 25, 2014 at 7:43:29 PM UTC-5, wrote:
"Only Americans who make less than $23,660 a year are automatically eligible for time-and-a-half pay after working 40 hours a week. " Shows that thresholds like these, as well as the minimum wage, should be inflation indexed, and possibly linked to the productivity index. -- Unka' George Much easier to just work for a company that pays more for overtime. Just because a company is not required to pay more for overtime work, does not mean that they can not pay more. And many companies do pay for overtime even though they are not required to do so. Dan http://www.wsj.com/articles/the-140-...job-1420659586 He does make more than $23,000 a year, but still gets overtime pay. Dan |
A billionaire explains the middle class
Hi, George.
Thanks for replying. On Wed, 07 Jan 2015 14:49:29 -0600, F George McDuffee wrote: On Wed, 07 Jan 2015 10:10:03 -0600, Frnak McKenney wrote: On Sat, 03 Jan 2015 11:40:26 -0600, F George McDuffee wrote: [...] IMNSHO it is unreasonable to expect the average, or indeed professional, investor to conduct in-depth due dillagance on every investment they make, to verify/validate the rating organization valuations http://tinyurl.com/oxhw2ah. Indeed, in many cases the securities broker/financial advisor was the advisor who suggested an investment in ABS [asset backed securities -- CDOs], CDS [credit default swaps] or interest rate swaps, based on *THEIR* understanding AT THE TIME. Which sort of begs the question, "Who will rate the ratings agencies?" Is there some sort of qualifying exam for becoming a Recognized Ratings Organization? Jes' curious... Frank McKenney -- http://tinyurl.com/2e7b5hs snip "Credit rating is a highly concentrated industry, with the two largest CRAs -- Moody's Investors Service and Standard & Poor's (S&P) -- controlling 80% of the global market share, and the "Big Three" credit rating agencies -- Moody's, S&P, and Fitch Ratings -- controlling approximately 95% of the ratings business." /snip Ah. So *I* could start a blog that assigned ratings to securities. It might be completely ignored, and, even if it was read and my ratings accepted as having some semblance of accuracy by assorted parties, my ratings wouldn't automatically qualify as "U.S. Gummint-Recognized Rating"... but I could do it. ( The financial industry will, no doubt, rest easier on learning that I have no intention of doing this. grin! ) http://tinyurl.com/3h6ymd7 snip "Originally, the SEC did not adopt specific standards for determining which credit rating agencies were "nationally recognized", and instead addressed the question on a case-by-case basis.[23] NRSRO recognition was granted by the Okay. "Nationally Recognized Statistical Rating Organization". ( Wonder what the "Non-Statistical Rating Organizations" use... "but that, O Best Beloved, is another story." ) SEC through a "No Action Letter" sent by the SEC staff. Under this approach, if a CRA (or investment bank or broker-dealer) were interested in using the ratings from a particular CRA for regulatory purposes, the SEC staff would research the market to determine whether ratings from that particular CRA are widely used and considered "reliable and credible." If the SEC staff determined that this was the case, it would send a letter to the CRA indicating that if a regulated entity were to rely on the CRA's ratings, the SEC staff would not recommend enforcement action against that entity. These "No Action Letters"... /snip Something like "The McKenney Financial Assessment Blog ratings do not appear to be so far out of line as to force us to take you to court if you use them to puff up your product"? Let's see... (2) Do I look like I can be easily bribed or intimidated? (3) Can my analysts add and subtract without excessive supervision? (4) Am I already bought? (5) Do my rating methods involve dowsing, witchcraft, or human sacrifice? (6) Can my staff and I be trusted to keep our mouths shut? Seems reasonable. ( "The SEC is visiting today; get that pentacle cleaned up!" ) One of the greatest weaknesses appears to be the lack of any publically available results, e. g. 10% of the bonds with a AAA rating from the Humperdink Rating Agency within 5 years of issuance, while only 1% of the bonds rated AAA by the Smith Agency were. Were... ? Sorry -- I think I lost a predicate here or something. "Were given an AAA rating", perhaps? FWIW: Item(5) above appears to be the weak link as the NRSROs will not divulge their ratings methodology, so it is impossible to evaluate their appropriateness in today's markets. From the results and anecdotes, it appears this is a highly subjective and idiosyncratic process, being more a matter of taste or esthetics than facts. Wait a minute. If the NRSROs don't have to reveal their methods, how can the SEC say that its "No Action Letter" has evaluated these unrevealed methods? ( Is the *SEC* using witchcraft? grin ) There is at least one non-NRSRO maverick credit rating agency that uses the 10k and other publically available objective/numerical data as input to a computer program that calculates various ratios, and using the historical data from a large number of industries/companies, calculates the likelyhood of default. Their results appear to be much more accurate, and as this is a "mechanical" process, if the same data is input the same rating results, no matter who does it. But, since it's a "non-NRSRO" -- assuming I've got this right -- then companies can't publicly use that company's ratings to sell their products. I'd guess that they could supply two figures -- Moody's rating *and* CompanyX's rating -- but that would likely mean paying two fees. What was that old line about computer hardware? "Nobody ever lost their job by buying IBM"? *If* you buy the argument that (e.g.) Moody's Secret Method For Financial Divination Using Tea Leaves And Charred Report Fragments actually works, and that divulging it would destroy the company, I can see only one route to having the ratings agencies... er, rated: by requiring that the method be disclosed to some group like the SEC so that group can maintain the secrecy of (e.g.) Moody's methods yet remain independent of Moody's so the designated group can be relied upon to perform the necessary analyses in a disinterested fashion. Is there another approach to this, one that wouldn't involve hours of televised Committee meetings where ratings agencies moan and sob that revealing the truth to the SEC would destroy the entire financial industry? Frank -- A striking fact of the last two years of financial trouble is how accountability has differed in the public and private spheres. On Wall Street and across the country, decades-old firms have failed, fortunes have vanished, and some former captains of finance face jail or fines. In Washington, meanwhile, most regulators and Members of Congress remain on the job, often with enhanced power. -- "Bernanke's Second Chance" / Wall Street Journal 08/26/09 -- Frank McKenney, McKenney Associates Richmond, Virginia / (804) 320-4887 Munged E-mail: frank uscore mckenney aatt mindspring ddoott com |
A billionaire explains the middle class
W Frnak McKenney wrote:
On Wed, 07 Jan 2015 14:49:29 -0600, F *George McDuffee wrote:* --* * A striking fact of the last two years of financial trouble is how* * accountability has differed in the public and private spheres. On* * Wall Street and across the country, decades-old firms have failed,* * fortunes have vanished, and some former captains of finance face* * jail or fines.* You wonder how much these investment banks (and others) can blame their inappropriateness on hackers and malwa ======================================= JPMorgan Data Breach Entry Point Identified: NYT (Reuters) - A computer breach at*JPMorgan Chase & Co*(JPM.N) earlier this year could have been avoided if the bank had installed a simple security fix to an overlooked server in its network, the New York Times reported, citing people briefed on investigations. -- http://www.ibtimes.com/jpmorgan-data...ed-nyt-1765472 |
A billionaire explains the middle class
On Sat, 10 Jan 2015 15:49:58 -0600, Frnak McKenney
wrote: snip One of the greatest weaknesses appears to be the lack of any publically available results, e. g. 10% of the bonds with a AAA rating from the Humperdink Rating Agency within 5 years of issuance, while only 1% of the bonds rated AAA by the Smith Agency were. Were... ? Sorry -- I think I lost a predicate here or something. "Were given an AAA rating", perhaps? /snip Indeed, much too fast on the send button after spell check. "were in default" should have been included. IMNSHO: Not only bonds, but everything rated should be included in [separate] league tables, e. g. CDOs. While default is objective and definite, perhaps 5/10/life of bonds table showing not only default but changes in ratings, both up and down, would be helpful. Data to construct the tables should be available, but where? Would a simple count be informative, or should the result be dollar weighted? -- Unka' George "Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants, but debt is the money of slaves" -Norm Franz, "Money and Wealth in the New Millenium" |
A billionaire explains the middle class
top posted
This just in. While the Commercial Mortgage Backed Collateralized Debt Obligations [CMBCDO] are a minor segment of the continuing ratings scam, at least some action was taken. http://tinyurl.com/px4rdje snip Standard & Poor’s will be suspended for a year from rating securities in the biggest piece of the commercial-mortgage bond market in a $60 million settlement with the U.S. Securities and Exchange Commission, according to a person with knowledge of the matter. The deal, which the person said may be announced as soon as tomorrow, will be the agency’s toughest action against a major credit rater. The SEC, which has been examining whether the credit rater bent criteria to win business in 2011, will ban the company from grading securities backed by multiple commercial loans, the person said. /snip ============== top posted ============ On Sat, 10 Jan 2015 15:49:58 -0600, Frnak McKenney wrote: Hi, George. Thanks for replying. On Wed, 07 Jan 2015 14:49:29 -0600, F George McDuffee wrote: On Wed, 07 Jan 2015 10:10:03 -0600, Frnak McKenney wrote: On Sat, 03 Jan 2015 11:40:26 -0600, F George McDuffee wrote: [...] IMNSHO it is unreasonable to expect the average, or indeed professional, investor to conduct in-depth due dillagance on every investment they make, to verify/validate the rating organization valuations http://tinyurl.com/oxhw2ah. Indeed, in many cases the securities broker/financial advisor was the advisor who suggested an investment in ABS [asset backed securities -- CDOs], CDS [credit default swaps] or interest rate swaps, based on *THEIR* understanding AT THE TIME. Which sort of begs the question, "Who will rate the ratings agencies?" Is there some sort of qualifying exam for becoming a Recognized Ratings Organization? Jes' curious... Frank McKenney -- http://tinyurl.com/2e7b5hs snip "Credit rating is a highly concentrated industry, with the two largest CRAs -- Moody's Investors Service and Standard & Poor's (S&P) -- controlling 80% of the global market share, and the "Big Three" credit rating agencies -- Moody's, S&P, and Fitch Ratings -- controlling approximately 95% of the ratings business." /snip Ah. So *I* could start a blog that assigned ratings to securities. It might be completely ignored, and, even if it was read and my ratings accepted as having some semblance of accuracy by assorted parties, my ratings wouldn't automatically qualify as "U.S. Gummint-Recognized Rating"... but I could do it. ( The financial industry will, no doubt, rest easier on learning that I have no intention of doing this. grin! ) http://tinyurl.com/3h6ymd7 snip "Originally, the SEC did not adopt specific standards for determining which credit rating agencies were "nationally recognized", and instead addressed the question on a case-by-case basis.[23] NRSRO recognition was granted by the Okay. "Nationally Recognized Statistical Rating Organization". ( Wonder what the "Non-Statistical Rating Organizations" use... "but that, O Best Beloved, is another story." ) SEC through a "No Action Letter" sent by the SEC staff. Under this approach, if a CRA (or investment bank or broker-dealer) were interested in using the ratings from a particular CRA for regulatory purposes, the SEC staff would research the market to determine whether ratings from that particular CRA are widely used and considered "reliable and credible." If the SEC staff determined that this was the case, it would send a letter to the CRA indicating that if a regulated entity were to rely on the CRA's ratings, the SEC staff would not recommend enforcement action against that entity. These "No Action Letters"... /snip Something like "The McKenney Financial Assessment Blog ratings do not appear to be so far out of line as to force us to take you to court if you use them to puff up your product"? Let's see... (2) Do I look like I can be easily bribed or intimidated? (3) Can my analysts add and subtract without excessive supervision? (4) Am I already bought? (5) Do my rating methods involve dowsing, witchcraft, or human sacrifice? (6) Can my staff and I be trusted to keep our mouths shut? Seems reasonable. ( "The SEC is visiting today; get that pentacle cleaned up!" ) One of the greatest weaknesses appears to be the lack of any publically available results, e. g. 10% of the bonds with a AAA rating from the Humperdink Rating Agency within 5 years of issuance, while only 1% of the bonds rated AAA by the Smith Agency were. Were... ? Sorry -- I think I lost a predicate here or something. "Were given an AAA rating", perhaps? FWIW: Item(5) above appears to be the weak link as the NRSROs will not divulge their ratings methodology, so it is impossible to evaluate their appropriateness in today's markets. From the results and anecdotes, it appears this is a highly subjective and idiosyncratic process, being more a matter of taste or esthetics than facts. Wait a minute. If the NRSROs don't have to reveal their methods, how can the SEC say that its "No Action Letter" has evaluated these unrevealed methods? ( Is the *SEC* using witchcraft? grin ) There is at least one non-NRSRO maverick credit rating agency that uses the 10k and other publically available objective/numerical data as input to a computer program that calculates various ratios, and using the historical data from a large number of industries/companies, calculates the likelyhood of default. Their results appear to be much more accurate, and as this is a "mechanical" process, if the same data is input the same rating results, no matter who does it. But, since it's a "non-NRSRO" -- assuming I've got this right -- then companies can't publicly use that company's ratings to sell their products. I'd guess that they could supply two figures -- Moody's rating *and* CompanyX's rating -- but that would likely mean paying two fees. What was that old line about computer hardware? "Nobody ever lost their job by buying IBM"? *If* you buy the argument that (e.g.) Moody's Secret Method For Financial Divination Using Tea Leaves And Charred Report Fragments actually works, and that divulging it would destroy the company, I can see only one route to having the ratings agencies... er, rated: by requiring that the method be disclosed to some group like the SEC so that group can maintain the secrecy of (e.g.) Moody's methods yet remain independent of Moody's so the designated group can be relied upon to perform the necessary analyses in a disinterested fashion. Is there another approach to this, one that wouldn't involve hours of televised Committee meetings where ratings agencies moan and sob that revealing the truth to the SEC would destroy the entire financial industry? Frank -- A striking fact of the last two years of financial trouble is how accountability has differed in the public and private spheres. On Wall Street and across the country, decades-old firms have failed, fortunes have vanished, and some former captains of finance face jail or fines. In Washington, meanwhile, most regulators and Members of Congress remain on the job, often with enhanced power. -- "Bernanke's Second Chance" / Wall Street Journal 08/26/09 -- Unka' George "Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants, but debt is the money of slaves" -Norm Franz, "Money and Wealth in the New Millenium" |
A billionaire explains the middle class
On Tue, 20 Jan 2015 14:42:01 -0600, F. George McDuffee
wrote: top posted This just in. While the Commercial Mortgage Backed Collateralized Debt Obligations [CMBCDO] are a minor segment of the continuing ratings scam, at least some action was taken. http://tinyurl.com/px4rdje snip Standard & Poor’s will be suspended for a year from rating securities in the biggest piece of the commercial-mortgage bond market in a $60 million settlement with the U.S. Securities and Exchange Commission, according to a person with knowledge of the matter. The deal, which the person said may be announced as soon as tomorrow, will be the agency’s toughest action against a major credit rater. The SEC, which has been examining whether the credit rater bent criteria to win business in 2011, will ban the company from grading securities backed by multiple commercial loans, the person said. /snip ============== top posted ============ On Sat, 10 Jan 2015 15:49:58 -0600, Frnak McKenney wrote: Hi, George. Thanks for replying. On Wed, 07 Jan 2015 14:49:29 -0600, F George McDuffee wrote: On Wed, 07 Jan 2015 10:10:03 -0600, Frnak McKenney wrote: On Sat, 03 Jan 2015 11:40:26 -0600, F George McDuffee wrote: [...] IMNSHO it is unreasonable to expect the average, or indeed professional, investor to conduct in-depth due dillagance on every investment they make, to verify/validate the rating organization valuations http://tinyurl.com/oxhw2ah. Indeed, in many cases the securities broker/financial advisor was the advisor who suggested an investment in ABS [asset backed securities -- CDOs], CDS [credit default swaps] or interest rate swaps, based on *THEIR* understanding AT THE TIME. Which sort of begs the question, "Who will rate the ratings agencies?" Is there some sort of qualifying exam for becoming a Recognized Ratings Organization? Jes' curious... Frank McKenney -- http://tinyurl.com/2e7b5hs snip "Credit rating is a highly concentrated industry, with the two largest CRAs -- Moody's Investors Service and Standard & Poor's (S&P) -- controlling 80% of the global market share, and the "Big Three" credit rating agencies -- Moody's, S&P, and Fitch Ratings -- controlling approximately 95% of the ratings business." /snip Ah. So *I* could start a blog that assigned ratings to securities. It might be completely ignored, and, even if it was read and my ratings accepted as having some semblance of accuracy by assorted parties, my ratings wouldn't automatically qualify as "U.S. Gummint-Recognized Rating"... but I could do it. ( The financial industry will, no doubt, rest easier on learning that I have no intention of doing this. grin! ) http://tinyurl.com/3h6ymd7 snip "Originally, the SEC did not adopt specific standards for determining which credit rating agencies were "nationally recognized", and instead addressed the question on a case-by-case basis.[23] NRSRO recognition was granted by the Okay. "Nationally Recognized Statistical Rating Organization". ( Wonder what the "Non-Statistical Rating Organizations" use... "but that, O Best Beloved, is another story." ) SEC through a "No Action Letter" sent by the SEC staff. Under this approach, if a CRA (or investment bank or broker-dealer) were interested in using the ratings from a particular CRA for regulatory purposes, the SEC staff would research the market to determine whether ratings from that particular CRA are widely used and considered "reliable and credible." If the SEC staff determined that this was the case, it would send a letter to the CRA indicating that if a regulated entity were to rely on the CRA's ratings, the SEC staff would not recommend enforcement action against that entity. These "No Action Letters"... /snip Something like "The McKenney Financial Assessment Blog ratings do not appear to be so far out of line as to force us to take you to court if you use them to puff up your product"? Let's see... (2) Do I look like I can be easily bribed or intimidated? (3) Can my analysts add and subtract without excessive supervision? (4) Am I already bought? (5) Do my rating methods involve dowsing, witchcraft, or human sacrifice? (6) Can my staff and I be trusted to keep our mouths shut? Seems reasonable. ( "The SEC is visiting today; get that pentacle cleaned up!" ) One of the greatest weaknesses appears to be the lack of any publically available results, e. g. 10% of the bonds with a AAA rating from the Humperdink Rating Agency within 5 years of issuance, while only 1% of the bonds rated AAA by the Smith Agency were. Were... ? Sorry -- I think I lost a predicate here or something. "Were given an AAA rating", perhaps? FWIW: Item(5) above appears to be the weak link as the NRSROs will not divulge their ratings methodology, so it is impossible to evaluate their appropriateness in today's markets. From the results and anecdotes, it appears this is a highly subjective and idiosyncratic process, being more a matter of taste or esthetics than facts. Wait a minute. If the NRSROs don't have to reveal their methods, how can the SEC say that its "No Action Letter" has evaluated these unrevealed methods? ( Is the *SEC* using witchcraft? grin ) There is at least one non-NRSRO maverick credit rating agency that uses the 10k and other publically available objective/numerical data as input to a computer program that calculates various ratios, and using the historical data from a large number of industries/companies, calculates the likelyhood of default. Their results appear to be much more accurate, and as this is a "mechanical" process, if the same data is input the same rating results, no matter who does it. But, since it's a "non-NRSRO" -- assuming I've got this right -- then companies can't publicly use that company's ratings to sell their products. I'd guess that they could supply two figures -- Moody's rating *and* CompanyX's rating -- but that would likely mean paying two fees. What was that old line about computer hardware? "Nobody ever lost their job by buying IBM"? *If* you buy the argument that (e.g.) Moody's Secret Method For Financial Divination Using Tea Leaves And Charred Report Fragments actually works, and that divulging it would destroy the company, I can see only one route to having the ratings agencies... er, rated: by requiring that the method be disclosed to some group like the SEC so that group can maintain the secrecy of (e.g.) Moody's methods yet remain independent of Moody's so the designated group can be relied upon to perform the necessary analyses in a disinterested fashion. Is there another approach to this, one that wouldn't involve hours of televised Committee meetings where ratings agencies moan and sob that revealing the truth to the SEC would destroy the entire financial industry? Frank -- A striking fact of the last two years of financial trouble is how accountability has differed in the public and private spheres. On Wall Street and across the country, decades-old firms have failed, fortunes have vanished, and some former captains of finance face jail or fines. In Washington, meanwhile, most regulators and Members of Congress remain on the job, often with enhanced power. -- "Bernanke's Second Chance" / Wall Street Journal 08/26/09 So much for those using Standard and Poor as an example of economic soundness. "At the core of liberalism is the spoiled child, miserable, as all spoiled children are, unsatisfied, demanding, ill-disciplined, despotic and useless. Liberalism is a philosophy of sniveling brats." PJ O'Rourke |
| All times are GMT +1. The time now is 10:08 PM. |
Powered by vBulletin® Copyright ©2000 - 2025, Jelsoft Enterprises Ltd.
Copyright ©2004 - 2014 DIYbanter