This is interesting:
A former senior analyst at Moody’s has gone public with his story of how one of the country’s most important rating agencies is corrupted to the core.
The analyst, William J. Harrington, worked for Moody’s for 11 years, from 1999 until his resignation last year.
From 2006 to 2010, Harrington was a Senior Vice President in the derivative products group, which was responsible for producing many of the disastrous ratings Moody’s issued during the housing bubble.
Harrington has made his story public in the form of a 78-page “comment” to the SEC’s proposed rules about rating agency reform, which he submitted to the agency on August 8th. The comment is a scathing indictment of Moody’s processes, conflicts of interests, and management, and it will likely make Harrington a star witness at any future litigation or hearings on this topic.
And what are they alleging the ratings agencies did? Everything we already know but if you say it out loud you hate the free market and are a dirty socialist:
We’ve included highlights of Harrington’s story below. Here are some key points:
Moody’s ratings often do not reflect its analysts’ private conclusions. Instead, rating committees privately conclude that certain securities deserve certain ratings–but then vote with management to give the securities the higher ratings that issuer clients want.
Moody’s management and “compliance” officers do everything possible to make issuer clients happy–and they view analysts who do not do the same as “troublesome.” Management employs a variety of tactics to transform these troublesome analysts into “pliant corporate citizens” who have Moody’s best interests at heart.
Moody’s product managers participate in–and vote on–ratings decisions. These product managers are the same people who are directly responsible for keeping clients happy and growing Moody’s business.
At least one senior executive lied under oath at the hearings into rating agency conduct. Another executive, who Harrington says exemplified management’s emphasis on giving issuers what they wanted, skipped the hearings altogether.
Again, I am not a lawyer, but what exactly has to happen before this stuff falls under RICO. How is this not an organized crime situation?
Villago Delenda Est
Because the perpetrators are not members of some despised ethnic minority?
pablo
You’ve got to understand, the rules are different for our Galtian Overlords.
Belafon (formerly anonevent)
Because the free market will take care of it. If you don’t like how Moody’s is rating things, then you will look at all of the literature on how the rating agencies are doing and choose a better one.
I just had a thought. The problem with the free market is really the same problem that Godel’s incompleteness theorem points out in mathematics, and the Church/Turing Thesis points out in Computer Science: An observer inside the system cannot make meta-decisions about the system.
cathyx
They planned it all the right way. First they bought off the politicians. Then they moved there people into key government positions. Then they broke the law. That’s some planning right there.
Villago Delenda Est
This really depends on what “Moody’s best interests” are defined as.
Those “troublesome analysts” may be interested in a product with integrity, which can stand the test of time. At some point in the past, that was considered to be the “best interest” of a rating agency.
But then the MBAs came along, and “best interest” was redefined not to standing the test of time and the long term prospects of the firm, but what is our stock price today, and what profit growth numbers can we publish (and get away with) to improve our short term bottom line and the potential bonuses for management.
A concentration on profit, not product, which is a fundamental misreading of cause and effect, is a root problem here.
Jewish Steel
@Villago Delenda Est:But, Villago. Our kids are at Exeter together. You can see the bind this puts me in, no?
jo6pac
New doj and supremes would help other than that commentors before me are correct. The best system $$$$$$ can buy.
MadRuth
To answer this question:
You have to have a President who is interested in looking in the rear view mirror and holding white collar criminals accountable.
Constance
I hate free markets and I’m a dirty socialist.
Doug
Leonard Cohen had it right.
Michael Finn
I am currently reading “All the Devils are Here” by Joe Nocera & Bethany McLean and they spend an entire chapter on Moody’s.
It used to be that you had to subscribe their ratings service to be able to read whatever they were grading but it changed in 1975 when they start to charge people to rate their debt.
But it all went to hell in the 1990’s when they went public. Suddenly the guy’s who were grading the loans lost all of their power because if they didn’t start grading Morgtage backed securities a certain way then they would lose the business of the issuer.
But really the Investors lost all interest in the details, they just wanted the AAA ratings. They didn’t care WHO did it, the regulations out there demanded that only two of the three agencies needed to rate something so they started to be played off one of another to get the highest ratings. The guys who were doing the research were being paid to have the answer ahead of time. Since it was an opinion/freedom of speech thing, it was argued they couldn’t be regulated.
Goldman Sacs had a list of people whom they did not want rating their crap they were selling because they were too honest.
Frankly this entire debacle is an indictment of the free market. Instead of the agencies getting better, they started a race to the bottom to get the most fees. I doubt anything has changed since that report.
Villago Delenda Est
@Michael Finn:
Goldman Sachs was taking “working the refs” to dizzying new heights.
ppcli
@Belafon (formerly anonevent): I hate to be a pedant, but since I do this kind of thing for a living I guess I am a pedant. Really the Gödel and Church/Turing theorems don’t say anything this sweeping. You can make and evaluate all sorts of statements about systems of formal number theory or Turing computation within the systems themselves. It’s that ability that makes it possible to prove the Gödel theorems to begin with. There are certain statements beyond a certain threshold of complexity that are undecideable, but the decisions involved in rating securities are far simpler than that.
Also the theorems only hold in general for systems of a significant complexity (such as: containing primitive recursive arithmetic) and I don’t think we’re dealing with systems that rich here.
Sorry about that – but I dare to be dull in the service of enlightenment.
fhtagn
@Jewish Steel:
Well, once you end up in stir, your kids won’t be at Exeter, so no, not a problem.
p.s. Golf this Sunday? Yes/no?
Samara Morgan
Be of good cheer, Cole, for i bring you tidings of great joy.
and more joy.
are we seeing a trend?
LOL
Comrade Dread
I’m guessing a full financial collaspe followed by a few weeks of rioting and unrest.
But I’d bet money on absolutely nothing coming from this beyond a few days of outrage on blogs.
Changing this would require a fundamental change to the way companies do business, returning to a more stable model that results in less short term profits, but greater longevity and stability, and no one wants to give up their million dollar quarterly bonuses.
Xenos
As long as AIG would insure any crap security, even when everybody know it did not deserve AAA ratings, nobody cared. And of course the Bushies were happy to let AIG escape all regulation, so the crime was complete. A systematic looting, good for several years before it would blow up and bring everybody down.
Someone needs to publish the names, addresses, churches, schools of the key figures. They need to be shamed, sought out and ridiculed, for generations, until they liquidate their assets and undertake a vow of poverty.
cleek
too big to be
faildismantled.eta; because of what @Comrade Dread said.
Samara Morgan
@ppcli: agree. and its so much simpler than Godelian incompleteness, anyways.
The free market is simply teleologically incapable of delivering improvement to the human condition, except by minor side-effecting (supply side economics).
It only reliably improves the human condition of the overclass.
celticdragonchick
@Villago Delenda Est:
Adding a little medieval flavor.
Villago Delenda Est
@Constance:
I am also a dirty soshulist because I’ve read AND UNDERSTOOD Adam Smith.
Who was, at heart, obviously another dirty soshulist.
There’s a reason why these fucktards have not read The Wealth of Nations. It’s not a page turner. It is dense. It is not an easy read. No one who has a job in network or cable news could possibly have read this book, their attention spans are reflected in their product.
Svensker
@Villago Delenda Est:
A fundamental problem of our time.
The Spy Who Loved Me
He looked the other way for 11 years? What made him suddenly outraged about Moody’s actions, other than the fact that he no longer works there?
Head Bulshytt Talker in Chief of the Temple of Libertarianism(superluminar)
How do these agencies stay in business? If I were a serious investor there is no way I would trust their judgement after this kind of revelation. Say what you like about our Galtian overlords, but they’re not stupid when it comes to making money – why would they listen to these clowns?
cathyx
@Head Bulshytt Talker in Chief of the Temple of Libertarianism(superluminar): They aren’t in business for you.
James Gary
@ppcli: Thank you. For whatever reason, name-checking Gödel’s Incompleteness Theorem seems to have become a fashionable buzzword signifier of “erudition.” It is nice to read someone reminding the general public what the Theorem actually says.
Michael Finn
@Xenos: It wasn’t just the Bushie’s that let everything go to hell. This was a gigantic clusterfuck that took two decades of hard work to blow-up.
But the men primarily reponsible for almost the entire mess are Alan Greenspan, Larry Summers, and Robert Rubin. They were charged with not only managing the money supply but managing how the banks wrote their books. They not only didn’t do their jobs, they actively prevented anybody else from doing their job.
At one point, they stopped the US Commodity Futures Trading Commission from regulating derivatives. Brooksley Born, the only hero in this disaster, tried to for two years to fix this problem before she washed her hands of the entire mess.
Wall Street is run by greedy bastards, it’s never going to change. What is going to have to change is our management of them. We can either prevent them from burning down the economy or we can watch them let it burn. So far we have done the latter.
Head Bulshytt Talker in Chief of the Temple of Libertarianism(superluminar)
@m_c
I am going to.be generous here and assume you know what you’re talking about with those terms, but I guess I’m just a bit slow and can’t quite work out how they fit together, so maybe you could unpack that arguement a bit…
Jewish Steel
@fhtagn: Ha! Golf.
Coincidentally, I live right close to a golf course but it is a public club and the most downmarket in town. With the worst golfers. Occasionally a ball will bounce from the sky near me as I am walking my dogs. I will be angry until I remember that the golfer in question likely couldn’t duplicate any two drives.
Michael Finn
@Head Bulshytt Talker in Chief of the Temple of Libertarianism(superluminar): The agencies actually have different units with different cultures. The ones that grade corporate/soverign debt is somewhat more honest than the security grading ones. That’s only true though If you can ignore the whole Enron, Worldcom, Tyco, AIG…
Remember this is a culture where if you are right 50% of the time, you are better than the flip of a coin which is worth millions of dollars apparently.
tkogrumpy
I believe it is too late to look for change at the top.At this point I have seem ample evidence that no challenge will be made against any one responsible for the open criminality and corruption.The fourth estate no longer exists as a force for change. I was happy to step up to the front during the sixties, but I think it it time a younger generation stepped up to the plate
tkogrumpy
@celticdragonchick: Here,Here.
Head Bulshytt Talker in Chief of the Temple of Libertarianism(superluminar)
@cathyx
Uh, you didn’t really understand my comment, did ya? I was saying that Moodys’ Target market was not getting good service here, and if I were them I’d be pretty pissed right now. Hope that helps, not that it was all that hard to work out in the first place.
Slugger
We need to buy Eliot Spitzer four hours a week with the full girlfriend experience and turn him loose! Perpwalkman, your country needs you!
Roger Moore
@Head Bulshytt Talker in Chief of the Temple of Libertarianism(superluminar):
Two points:
1) Some businesses are legally required to listen to the ratings agencies. For example, banks get to count capital against their reserve requirements with a discount that depends on its rating by a nationally recognized ratings agency. IOW, our regulatory agencies have effectively outsourced part of their function to these fuckers.
2) The smart money wasn’t listening to their ratings. The smart money was using their ratings to fool the not-quite-so-smart money into buying shit sandwiches. That’s the kind of thing that happens when you let the people being rated bribe the ones who are rating them.
Note that point 2 is a substantial real flaw with free markets that glibertarians fail to recognize. The glibertarian point of view is that companies will be kept honest by the power of the market, which will run them out of business if they’re dishonest. But market theory also says they should be willing to trash their business if the value of doing so exceeds their discounted future earnings. So if being honest gives poor returns and selling out gives a big windfall, it may be perfectly rational to sell out even if you know you’ll be run out of business for doing so.
fhtagn
@Head Bulshytt Talker in Chief of the Temple of Libertarianism(superluminar):
Is Target really Moody’s market? That seems a little… blue-collar.. for their Galtianships.
fhtagn
@Jewish Steel:
John Daly practices on your local golf course?
Chapeau, monsieur!
fhtagn
@Samara Morgan:
Who taught you all those long words without providing a logic function?
Bex
@celticdragonchick: “Who will rid me of these troublesome analysts…” Ya beat me to it.
daryljfontaine
@Michael Finn:
This is endemic to any for-profit ratings/watchdog group whose cash flow depends on the organizations which it scrutinizes. This is the kind of bullshit which should be Example One when debating free market dogmatics who insist that everything is better when private profit is involved.
D
fhtagn
@Bex:
Ahem. Turbulent analysts.
Which is, arguably, more appropriate, when you consider how they’ve futzed with the stock market recently.
Sam Houston
Glad you posted about William J. Harrington.
Here’s his 78(!) page commentary: here.
It reads a bit demented but it’s chock full of S&P dirt.
What’s especially damning is how he takes the proposed rule changes for ratings agencies and applies to S&P’s culture in 2002, noting that some rules would actually make S&P more reckless.
Why weaken the role of management over ratings?
Some of it’s interesting. Too much of it reads like greed enshrined in heaven.
scarshapedstar
Question.
How, exactly, does Moody’s make money? Do they just charge a fee for each rating?
fhtagn
@scarshapedstar:
Fees from the corporations that they then rate.
scarshapedstar
Interesting. You know, in nature, parasites generally alter the appearance of the host in such a way that turns off mates (hence the insistence by females of so many species on lengthy mating displays showing off every part of the body).
Here, unless you got the Moody’s worm, you ain’t even in the game…
Head Bulshytt Talker in Chief of the Temple of Libertarianism(superluminar)
@fhtagn
Ha! Goddam predictive text.
@Roger Moore
Thanx for that, forgot about the legal constraints on others.
cleek
@scarshapedstar:
if you have some debt (you’re selling some bonds, or whatever) and you need to have it rated by a ratings agency, you go to one of the handful of government approved (see also, “legalized monopoly”) credit rating agencies and then you pay them to analyze your situation. they check out your financials and give you a score.
the problem is that a lot of things are required (by law) to have minimum ratings and so debt issuers will make it worth Moody’s effort to come up with higher ratings than they really should.
it’s a built-in conflict of interest.
cleek
@cleek:
also… lower debt rating means you have to pay more interest on the bonds you sell. so, companies will encourage ratings agencies to give higher ratings, to save on interest.
Samara Morgan
@Head Bulshytt Talker in Chief of the Temple of Libertarianism(superluminar): Evolutionary Economics.
the “freed” market is a scam run by the overclass. look around you…even juicers profess belief in spite of vasty quantities of empirical data to the contrary.
Davis X. Machina
@Michael Finn: The ratings agency bind — or ‘bind’, it’s 100% self-inflicted — is familiar to every private school teacher.
“Grade these kids fairly, and accurately so that we, and they, have some sense of how they’re doing. Fail anybody, especially the children of the heavy-hitters, and the revenues from tuition will dry up like a puddle in a July driveway.”
The SAT’s and such aren’t all that and a bag of chips, but they’re at least at a couple removes from that transaction.
The ratings agencies used to be, too.
Samara Morgan
@Villago Delenda Est:
nah, just another Dead White Guy Phailosopher.
Alex S.
Rating agencies shouldn’t be businesses. They should be public companies. And public debt should be rated by an international organisation.
Also, that witness needs protection.
Samara Morgan
@fhtagn: im not sure i believe in logic functions n/e more, except for silicon intelligence.
i believe in social brain hypothesis.
Alex S.
Free markets are fine. The problem is that today’s version of a free market differs from the theoretical free market. Rating agencies are a good example. They are supposed to provide potential customers with information, and the pure version of the free market needs total information on both sides of the deal. But actually, they gave out wrong information (AAA ratings) and this created the bubble.
Corner Stone
@Alex S.:
“Banks” shouldn’t be businesses either. They should be regulated utilities.
If an investment bank wanted to play with leverage then they should be privately funded by people willing to risk their capital and then have at it.
Samara Morgan
here is a PSA for teh juicers.
wanna learn sumpin’?
go for it.
do you see how clever this is?
Even if youn dont get college credits, you get a RANK.
so game theoretic.
Samara Morgan
@Alex S.: even the theoretical free market is a LIE.
for example, please explain how free markets will “eat the rich.”
Head Bulshytt Talker in Chief of the Temple of Libertarianism(superluminar)
@DXM
yeah this is central to what I’m saying – if you’re the parent of a kid going to such a school but without access to great wealth, wouldn’t you question too-good-to-be-true results? For the record, I in no way question the value of my degree, despite the fact it was awarded by the same institution that gave Andrew Sullivan his.. :(
cathyx
@Head Bulshytt Talker in Chief of the Temple of Libertarianism(superluminar): You really live up to your name. You expect us to understand your implied comments when you say ‘if I were a serious investor’. My mom thinks she’s a serious investor.
burnspbesq
John Cole:
Which is why you skipped over a fairly important step in the analysis.
In order for the criminal part of RICO to apply, the United States has to prove a “pattern of racketeering activity.” Proving a pattern of racketeering activity requires that you be able to prove “predicate acts,” and those predicate acts have to be actual crimes. If you would be so kind as to tell us which specific sections of Title 18 of the United States Code have been violated by the ratings agencies, then we can talk about RICO. It would also be helpful if you would describe the evidence that you would use to prove those crimes.
None of which is to suggest that the behavior of the ratings agencies hasn’t been outrageous. However, it is not always the case that “outrageous” and “criminal” are synonymous, no matter how many times Matt Taibbi tries to tell you that they are.
Alex S.
@Samara Morgan:
How can something theoretical be a lie?
Why should the free market eat the rich (I’m not quite sure I understand)?
Samara Morgan
@Michael Finn: you have to consider the Larry Summers is just trying to stave off/slow down NLS collapse.
Like muslims, aspies are not like the rest of humans.
fhtagn
@Samara Morgan:
Whether you believe in it or not hardly matters. You clearly need one.
Samara Morgan
@Alex S.: that is a basic premise of Free Market Theory.
That the perfectly “freed” market will “eat the rich.”
of course theories can be lies.
when they fail empirically in application.
For example, the Econopalyse That Ate Americas Jobs is the perfect failure of “freed” market theory.
Jobs move to cheaper labor.
QED
Alex S.
@Corner Stone:
I think I agree for the most part. The only problem I see is that banks need to expand their monetary base as the economy grows. Private companies do that by making profits. As public companies banks would depend on taxation or on restraining their lending. But yeah, I guess that’s what you mean by ‘regulated utilities’.
Corner Stone
@Samara Morgan:
Stated where?
Samara Morgan
@Corner Stone: oh thank u sooooooo much CS.
LOL! “of course”.
juicers are just as stupid as teabaggers when it comes to economics. :)
burnspbesq
Here’s a good article from the current issue of the Journal of Criminal Law and Criminology that describes the difficulties in prosecuting ratings agencies under current law.
http://findarticles.com/p/articles/mi_hb6700/is_3_101/ai_n57800206/?tag=mantle_skin;content
Alex S.
@Samara Morgan:
The free market theory does not say that. If you still think so, you can show me the proof. The theory of the free market says that free markets are the best way to provide customers and producers with information. The expression of this information is the price of goods. It will be at the level where demand equals supply.
It’s not the job of free markets to make society more equal. That’s a completely different aspect. You can tax a product, that is, tax something on the market, but it will decrease either supply or demand and lead to waste or shortage. So it’s better to tax outside of markets.
Roger Moore
@Head Bulshytt Talker in Chief of the Temple of Libertarianism(superluminar):
Don’t underestimate the importance of unsophisticated investors, either. One of the big lies of the Free Market types is that people are well enough informed to make good decisions. Stuff like this proves how untrue that really is. Ordinary buyers just don’t have the resources to find out what’s going on in the market to the extent the big investment banks do, so they depend on third parties like newspapers and ratings agencies. If the sophisticated investors can get those information sources to spread lies for them, they can rob the ordinary investors blind. That’s especially true in the case of debt products like CDOs that are deliberately opaque.
patrick II
@The Spy Who Loved Me:
That is a conundrum. The only way to find out what was going on is from insiders. If they were inside that long they were corrupted to some degree themselves. If we don’t listen to them however, we have little chance of learning more.
There are degrees of corruption I suppose. Someone who works for salary and has a family but who’s heart is not in it seems to be a possibility.
This type of trap is more general. Supposedly, we can’t trust the rich politician who works for the poor — he is not authentic. We can’t support the politician who supports campaign reform because he accepts contributions from corporations, we can’t support environmentalists who because they often travel by fuel wasting jet airplanes.
People exist in the game as it is. I think we have to be open to imperfect people — by the current measure — working for change.
Head Bulshytt Talker in Chief of the Temple of Libertarianism(superluminar)
@cathyx
You seem to have some difficulty understanding the word “if”.
Samara Morgan
@Alex S.: /yawn
its the glibertarian interpretation.
The Spy Who Loved Me
Doesn’t St. Warren of Buffet own Moody’s? Does anyone here seriously think the current DOJ would do anything that harms Buffet? I think not.
cathyx
@Head Bulshytt Talker in Chief of the Temple of Libertarianism(superluminar): You don’t seem to understand that the serious investors who you are referring to are already in on the game. The rest of us are in it for their taking.
Samara Morgan
@patrick II:
‘zactly.
and unwavering belief in the “freed” market is foundational to Murrican Exceptionalism.
its like a fucking religion.
anti-empirical and counter-rational.
:)
Alex S.
@Samara Morgan:
So what? I don’t know what you’re trying to say. I said that it’s not the job of the free market to lead to a more equal society, you try to refute this claim with something on LoOG that you don’t believe in either. So I guess we’re fine.
The Spy Who Loved Me
To correct comment above, Buffet only owns about 13% of Moody’s. This is down from the approximate 22% he held in 2008, the year mortgage backed securities imploded.
Corner Stone
@Samara Morgan: Wow.
Head Bulshytt Talker in Chief of the Temple of Libertarianism(superluminar)
@71
Ok, I see your point but I’d like see some.figures on uninformed small investors v. large funds when it comes to ratings. Also, are most of the groups using the agencies for their own ends the large funds mentioned, or a group of reletively small institutions?
If this all comes off as making excuses, then that is not my intention, rather I want a clear view of the facts and connections here before rushing to judgement.
Samara Morgan
@Alex S.:
sho nuff.
but what IM SAYIN’ is that the freed market is a LIE. the “freed” market simply cannot improve the human condition of the underclass.
the freed market farms the underclass for Profit!.
Gordon, The Big Express Engine
The agencies also make money by publishing research on the corporations they rate. They charge a lot for these subscriptions. I agree with the comment above about the divisions within the agencies. The corporate ratings are usually pretty sound. I work at a place where we create our own ratings and they usually track pretty well to the agency ratings.
Samara Morgan
@Corner Stone: swim to reach the end dude.
i jus’ kerbstomped your ice cream cone.
:)
Head Bulshytt Talker in Chief of the Temple of Libertarianism(superluminar)
@76
Ah, now I see what you were trying to get at! That’s a fair point, just one you didn’t make very well in earlier replies – anyway see my latest for a response.
Corner Stone
@Samara Morgan: I think whatever persona, or personae, you may have once had have all blurred.
Whatever point you are trying to make, or think you have made, seems to have long ago blended into some unquenched vendetta against people who are not me.
Samara Morgan
@Corner Stone:
nah, my vendetta is against teh Stupid and teh Dishonest. and Censors. like Cole and DougJ.
and its a Kanly.
like i said to Reihan Salam when i made him cry….i dont want to stop people blogging…i just want to stop them lying.
/sideways smile
Villago Delenda Est
@Samara Morgan:
Damn, you are stupid. And as proud as any glibertarian to display that stupidity in public.
You mistake the through the looking glass interpretation of Smith for what he actually talks about.
Alex S.
@Samara Morgan:
I don’t want to run in circles, but maybe there is another mix-up in terminology. What you mean by “freed” market would not be the theoretical version of the free market either. This kind of profit-making would only be possible if the markets aren’t free at all. Because if they were, someone would try to steal something of that profit by entering the market and setting prices just a little lower, so goes the theory. Your scenario is only possible with companies that have market power and which forbid the entry of new competitors. But in the true free market there is no company with market power. And yes, in the perfect scenario, no company would make any profit at all. But even that doesn’t mean that there are no rich people anymore. Personal abilities, investment of time in education and personal strife will still create rich people.
Of course, the free market is a theoretical construction that doesn’t exist in the world (although the markets of cheap everyday-products approach it). But it’s an ideal worth approaching. And I’m sorry to ramble on for so long, but this is another example of republican abuse of terminology. ‘Free market’ does not mean that companies can do whatever they want. It just means that the markets are free, free to enter and to leave, a free flow of information and the right price. And, of course, even free market hero Adam Smith said:
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
Samara Morgan
we all gotta get our pumped up kicks somehow.
i think foster the people is going to win the VMAs.
Samara Morgan
@Alex S.: Adam Smith is a Dead White Guy Phailosopher.
No it isnt. That is what Evolutionary Economics disputes.
Samara Morgan
@Villago Delenda Est: i may be a lot of things, but stupid is not one of them.
Please, give an example of market-based economies that have improved the human condition of the underclass.
Villago Delenda Est
@Samara Morgan:
The United States, 1932-1974 or thereabouts.
You are INCREDIBLY stupid. You’re too stupid to recognize just how stupid you are.
Just like the glibertarians you decry.
Alex S.
@Samara Morgan:
When there are two theories next to each other we are in the realm of opinion, so I guess that’s it.
East Germany, Poland, Czech Republic,…
Carol from CO
How is this not an organized crime situation?
A more interesting question is Why is this not an organized crime situation?
Jay S
@burnspbesq: I’m not sure why bribery and extortion laws wouldn’t be applicable. This description of payoffs to avoid bad ratings seems to fit every story I’ve read. I didn’t think the thing you were trying to avoid exposing had to be a crime in order to have extortion laws apply.
Villago Delenda Est
I misspoke.
Samara/M-C isn’t stupid.
She’s obtuse.
So obtuse that it’s very easy to perceive it as stupidity.
But the fact remains, when you start out a post with “Adam Smith is a Dead White Guy Phailosopher” you’re not here to actually have a conversation. I mean, if I started out refuting one of her wildly crazy recitations of the virtues of Islam by saying “Mohammed is a Dead Brown Guy Phailosopher”, she’d be pretty justified in calling ME stupid. Shit, she even disses fellow Muslims (if she actually is a Muslim…the Wahabbist would contend she’s an apostate and should be put to death if she’s actually a Sufi) right here in this forum if they don’t agree with her lockstep.
Villago Delenda Est
@Carol from CO:
I believe I answered that at the top of the comments :)
fhtagn
@Samara Morgan:
What you’re saying is that you don’t understand basic logic or complex phenomena.
Sho ’nuff.
suzanne
My mom used to work for Moody’s, and she loved it. This is deeply sad.
Belafon (formerly anonevent)
@ppcli: I play with the stuff, too, though not as often as you probably. I realize the theorems are not directly applicable to the systems I am talking about, but one of the things both theorems talk about is the limits of what can be determined from inside the system. That’s what I thought was important here.
I on the other hand believe that capitalism, which definitely involves a human element, is complicated enough to think about what can be done from inside and what limits there are from that position.
Samara Morgan
@Villago Delenda Est: global market economies just improve the condition of the overclass. Americans were the global overclass for a while.
@Alex S.: side-effecting. the human condition of the underclass only improved as a side-effect of the oligarchs gettin’ richer.
Samara Morgan
@fhtagn: nah, im sayin’ Homo sap. doesnt operate based on logic. I unnerstand complex phenom very well.
that is the biological basis of belief.
@Villago Delenda Est: there is no equiv “dead brown guy philosophy.”
Hayek, Hume, Oakeshotte, etc are the Dead White Guy Phailosophers.
Their ideology has been EMPIRICALLY PROVEN to be WRONG.
i didnt make the term up, but i did change the Phil to Phail….its a Joycian tribute, and a double entrendre about the White Patriarchy’s pen1s obsession.
Villago Delenda Est
@Samara Morgan:
Once again, she demonstrates her utter obtuseness.
She also has no idea what “empirical” means.
fhtagn
@Samara Morgan:
Oh dear, oh dear. Hume’s ideology has been empirically proven to be wrong? And by whom, dear child? By whom?
Would you care to specify just what Hume’s ideology is and who delivered this alleged refutation?
Samara Morgan
@fhtagn: /yawn
dont care. Hume, Hayek, Oakshotte, etc, etc, are all in the dustbin of history as far as im concerned.
they are totems used to scam the proles into voting against their economic interests.
@Villago Delenda Est: empirical
On OBSERVATION the “freed” market does not improve the general human condition, and only improves the condition of the overclass.
cite, the Econopalypse that Ate Americas Jobs.
cite, the stockmarket rebound and epic bonuses for Wall Street
Amir Khalid
@Villago Delenda Est:
When does m_c ever come here for a conversation? She has never struck me (or, I bet, you) as a person who welcomes debate, or who seeks to grow intellectually from it.
We Juicers are basically the staff of her own private Argument Clinic. She starts her arguments by airing obtuse opinions based on incomplete information, and on badly understood and ill-applied (by her) theories with impressive names. She disregards standard orthography, logic and common courtesy. And, as she often demonstrates, she’s a sore loser.
TenguPhule
We will not have peace until the last Republican is strangled with the entrails of the last Liberterian.
Villago Delenda Est
@Amir Khalid:
Yup, all true.
@TenguPhule:
Or until Matoko-Chan is strangled with the entrails of Hermione Granger-Weasley.
Caz
If their ratings are inaccurate, politically charged, or the result of corrupt management, then they will lose credibility in the market and the market will punish them accordingly. They are basically putting out opinions on whether certain products are good or not. They aren’t involved in the production or marketing chain, so why should they be held criminally liable for lying about the safety of products?? If they are lying, people will lose faith in them and they will suffer profit losses. The situation doesn’t require anything outside the market.
Yutsano
@Caz:
Except, of course, when they get paid to lie, which is pretty much what happened.
Amir Khalid
@Yutsano:
I don’t understand why they were ever allowed to take money from the companies they rated. That was the obvious quick road to corruption.
Villago Delenda Est
@Caz:
Um, dumbass, the entire point is that “the market” is rigged, and they HAVE NOT been punished, and WILL NOT be punished by “the market”.
The stupid of Caz. It burns.
Yutsano
@Amir Khalid: The ratings companies are private companies, and as such are required to charge for their services. And there is a logic to keeping that system intact, but the big issue is no one was standing over them with a ruler like a Catholic nun to make sure they were staying honest. When they found they could turn a profit by lying and then that got them even MORE profit, the Ferengi instinct kicked in. Hell even the IRS has a watchdog.
fhtagn
@Samara Morgan:
No, I don’t imagine you do care. You don’t know the first thing about Hume, who is a world-class philosopher, one of the founders of modern thought, a skeptical empiricist – someone whose values you ought to share, if you had any values. No wonder you have changed names so many times after your old name was ridiculed as an emo-trolling, ignorant fool. You’re just the same ignorant wing-nut crank that you always were, even if you’ve faked up a change of label.
Alex S.
@Samara Morgan:
I disagree, why is it a side-effect? It’s as if you say that by default, wealth only trickles down. The scandinavian model, on the other hand, shows how a relatively equal society goes along with a market economy. But your use of the word ‘oligarchy’ was precise. In a market economy, it’s the duty of the polity to keep money out of politics, otherwise wealth equals power. But without a market economy the underclass wouldn’t even enjoy an absolute improvement in living standards, much less a relative one. A completely moneyless political system is probably unrealistic, but this is where taxation comes in, again.
Omnes Omnibus
@Alex S.:
Why? Because she said so. Obviously.
Ozymandias, King of Ants
@Amir Khalid:
No we’re not.
Felanius Kootea
@patrick II: I like this.
Felanius Kootea
@Samara Morgan: I’ve found it truly disturbing that a song that’s inspired by a mentally ill kid shooting 14 people to death in a Nebraska shopping mall has such a catchy tune and light-hearted video. I find myself shuddering when it plays on the radio. The tune sure is catchy though; I’ve found myself humming it in spite of myself.
Samara Morgan
@Amir Khalid: i would really like to discuss the Quran, mutawatir and shariah law with you.
but you won’t.
@fhtagn:
nor do i care about learning about Hume. He is a first culture intellectual , and thus useless to me.
@Alex S.:
no…The scandinavian model shows how a relatively equal society goes along with a REGULATED market economy.
Samara Morgan
oh chort.
moderation.
@Amir Khalid: i would really like to discuss the Quran, mutawatir and shariah law with you.
but you won’t.
Samara Morgan
@fhtagn:
nor do i care about learning about Hume. He is a first culture intellectual , and thus useless to me.
Samara Morgan
@Alex S.:
no…The scandinavian model shows how a relatively equal society goes along with a REGULATED market economy.
Samara Morgan
@Felanius Kootea: do think it will win the VMA?
fhtagn
@Samara Morgan:
I know rather more than you ever will about Hume. I’ve read him, for one thing. Of course you don’t care about what Hume has to say. That would just interrupt your wingnut emo-trolling. You’ve read a couple of magazine articles about evolution, misunderstood those and believe yourself an expert. Similarly with Islam. And no, I don’t believe you’ve worked for any political campaigns, before you peddle that obvious lie. You are much too lazy to do anything that demands work.
Odie Hugh Manatee
A person who robs a financial institution with a gun gets jailed, convicted and tossed in prison (for a long time) in a heartbeat. When those same financial institutions rob the people of the country? They are allowed to do so with impunity and without a gun.
The difference is that the financial institutions have control of the laws because they own the politicians who make it. They have bought and paid for their protection, they own the ‘rights’ to fleecing the American public. The politicians who provide cover for these crimes are doing little more than running a protection racket.
These are the assholes who need to be brought up on RICO charges, the politicians, past and present, who enabled this behavior because they were paid to do so. The financial institutions couldn’t have done a damned thing without their paid assistance.
When a good portion of your politicians (past and present) should be up on RICO charges, you know you are fucked. Obama is only one man and this corruption runs deep and it has tentacles throughout our systems. That is why it will be damned near impossible to do anything about it any time soon.
They ‘designed’ it that way.
BillinGlendaleCA (aka 10amla)
@Ozymandias, King of Ants: LMFAO.
Yes we are.
Yutsano
@fhtagn: Just out of curiosity, are you bored? I can’t think of any other reason why you’re beating your head against that wall.
Samara Morgan
@fhtagn: pissy aren’t you? did i tread on your last nerve?
Dead White Guys
scav
@BillinGlendaleCA (aka 10amla): We could perhaps start a long technical disputation about the “private” part of the assertion. muyloca_chinwag does have to share with nerf_ball, chex_mix and a few others. She really is the intellectual equivalent of a mashup between a PC clipboard for individual facts and GoogleAd’s attempt to be relevant to the thread.
Samara Morgan
@scav: well, its the “free” part i dispute.
regulated markets can deliver social justice.
“freed” markets can’t.
Samara Morgan
@Yutsano: nah, im bored.
and im gettin’ tired of batting the juicers around like intellectually half-dead mice.
Samara Morgan
@BillinGlendaleCA (aka 10amla): sure you are…..you just aren’t very good at it.
Yutsano
@Samara Morgan: Please don’t feel like you have to stay on our account. In fact work on your ideas for awhile then come back. Then maybe you’ll actually get a clue. I doubt it though. Certitude is an ugly mistress.
Felanius Kootea
@Samara Morgan: Probably. Sigh.
scav
@Samara Morgan: Oh if you could only clue in on how exactly inapposite that was to the sub-thread. It’s nearly a text-book example of the description I made of you. Well done you.
Villago Delenda Est
The thing about M-C, and what she fails to grasp in one of the most glorious displays of petulant ignorance I’ve seen, is that no one here is arguing for a “freed” market. We’re actually advocates for a regulated, monitored market so that it does what it does best, so it can function at something approaching its theoretical efficiency.
Even “dead white guy” Adam Smith understood all this. Which is what I and others have been saying. But M-C, again in her glorious petulant reading-comprehension impaired ignorance, is pissed, apparently, that we’re in agreement in substance if not precise detail, and this annoys her no end.
Which is why she can be accurately characterized as obtuse.
Because, once again, she buys in totally to the propaganda of the Right and think THAT represents whatever she imagines as the BJ consensus out to oppress her.
fhtagn
@Samara Morgan:
Better dead and white than brain-dead and trolling these threads. You’ve missed the whole point about the two cultures of C.P. Snow, by the way. Oh, let me guess, you have no idea what that means. Well, there’s a surprise!
fhtagn
@Yutsano:
Oh you know, it’s a hot, humid night and I might as well bat even a brain-dead mouse around to flex my metaphorical paws. Besides, someone has to educate the feral youth of today, otherwise they go on the rampage, steal televisions and start screaming when they can’t figure out how to get the magic pictures to work.
Elise Mattu
Oh RICO does apply. However when a firm or agency is to be investigated, first someone at the SEC has to put together a memorandum of Understanding about the investigation. Then things are looked into, and important records seized and/or copied etc.
In one important investigation, one of the Big Shots at the SEC saw to it that the matter was dropped. That Big Shot went on to get a top position at Deutsche bank, the very firm that the guy stopped the SEC from investigating. And once the plug gets pulled on the investigation, all the reference material, all pertinent documents, everything that is a record of what has gone on gets shredded, according to regulations.
If you haven’t read Matt Taibbi’s expose of all this, check out the current week Rolling Stone, it will make you weep.
LosGatosCA
It’s unAmerican to interfere with the relationship that the ever present aristocratic sadists have with their peasant underclass masochists that believe the pain from their wealthier betters makes them stronger. It’s a continual Stockholm syndrome where the masochists believe the sadists are benevolent and reluctantly punishing in serving the greater good and not just crony capitalists rigging the game in their favor.
I guess it’s just easier to watch the ironically classified ‘reality’ shows on teevee then to engage in critical thinking and act on the facts.
Jonquil
I just want to be there when they do the Wall Street perp walk.
Elise, I just finished Taibbi’s article. I was too bummed to weep, I just had a double shot of vodka and cursed excessively.