Europe's Debt Solution

[2046]

A perfect example of reversing cause and effect:

Europe's New Debt Solution: Create Their Own Ratings Agency That Only Gives Friendly Ratings

http://www.businessinsider.com/europe-dose...heir-own-2010-3

Is your nation under massive financial pressure due to deteriorating sovereign debt ratings?

Rising interest costs got you down?

Rather than having to actually tackle your mounting debt problems, here’s an innovative solution from some Eurozone finance ministers — create your own, friendlier credit ratings

Look at the mystic mentality of this Der Spiegel propaganda piece, thinking that a credit rating has the voodoo power to make companies go broke or prosper, so clearly the government must nationalize them or create their own ratings company to harness this power and protect the public:

Euro-Zone Covernments Want to Curb Power of Ratings Agencies

http://www.spiegel.de/international/europe...,681486,00.html

Rating agencies have massive power over the fate of companies. A change from an "investment grade" to a "junk" rating can cost a firm billions or even cause it to go bankrupt. The big three -- Moody's, Standard & Poor's and Fitch -- can even decide the fate of entire countries. All that is currently preventing a massive liquidity crisis for Greece is the fact that it still has an A2 sovereign credit rating from Moody's. But with the agency already threatening another downgrade, such a crisis may not be far off.

Now European governments are planning to take measures to break the dominance of the main ratings agencies...

[Rockefeller]

I have not read the details, or thought about all the implications. But on the first look, this seems like a step in the right direction.

After all, the big three ("monopolized" by the SEC) played a huge role in the financial crisis. Removing constraints on public "companies" and (essentially) private sector to follow credit ratings issued by these certified agencies would allow better rating agencies (and standards) to enter the market. Once that happens, market players will be able to do better assess risk while purchasing CDS.

[aequalsa]

If Greece falls apart I'm blaming YOU for not believing hard enough to make it become true.

I wish I were home...I wish I were home...I wish I were home...