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

"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

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

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"

"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

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)

"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.

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.

"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.

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.

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.

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.

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.

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.

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

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

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

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)

"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.

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.

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."

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. Stress testing banks doesn't address
the question.

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

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

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

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

On Tue, 6 Jan 2015 06:15:04 -0800 (PST),
wrote:

snip
Stress testing banks doesn't address the question.

But what do top specialists in the field say? "The U.S. stress tests succe=
eded because they forced banks to raise a lot of capital," says Anil Kashya=
p, an economist at the University of Chicago's Booth School of Business ...=
"
/snip

While this does indeed seem to indicate *SOME* positive
action, if we look at the events leading up to 2008 a major
contributing factor to the real-estate asset bubble appears
to have been the so-called "merchant banks" such as Lehman,
Bear-Sterns, and Merrill which were outside the regulatory
pervue of the FDIC and FRB. These "merchant banks" had
morphed into prop traders / hedge funds and were leveraged
at 40:1 or more. These along with Goldman-Sachs, were among
the leading creators and traders in the residential mortgage
backed collateralized debt obligations, some of which were
synthetic or virtual and contained no "bricks and mortar"
assets at all. In other cases the CDOs were backed by other
CDOs, producing the so-called CDO "squared." [This was a
re-run -- see Goldman's Shenandoah and Blue Ridge from 1928
http://tinyurl.com/kjoowa5 ]

The trouble seems to have started [from the perspective of
those unlucky to own stock in the merchant banks] when the
"masters of the universe" started believing their own hype,
and began "investing" in their own paper creations, albeit
only in the "safest" tranches http://tinyurl.com/p2ovckk.

"Those who learn nothing from history are condemed to repeat
it" may be trite, it is also true. For anyone interested in
this off topic thread [well gold is metal] watch these
dramitizations on You-Tube to get the feel of what we are
yammering on about.

About the collapse of Lehman
From the BBC http://tinyurl.com/lde7vvh

For an earlier cycle [Enron]
http://tinyurl.com/qynxdjk

An even earlier cycle and lead-in to the 1929 stock market
bubble. [Florida land bubble]
http://tinyurl.com/nctz7cy
http://tinyurl.com/pm2j5r2

Humans are the only animals you can skin more than once...


--
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"

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.

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.

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.

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

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

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"

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.

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

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

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

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"

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"

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