The following article suggests that credit rating agencies have too much power and can unleash tremendous financial trauma upon global financial markets. The situation in Greece, Portugal and Spain is a case in point, as well as the case of the US property debacle. PLEASE! Read on...
Based on the article cited, it was the US government which gave the 3 main credit rating agencies a oligopolistic market in the credit assessment market.
More importantly, ALL of the problems created in financial markets arise because of government. Consider the following list:
1. CEOs are unaccountable because with the benefits of a good lawyer they are able to circumvent arbitrary laws because they have no underlying principle or 'spirit', such that a well-trained lawyer will find a loophole. Government regulation is an invitation to break the law - call it 'moral ambivalence' - required to keep these fascist regimes in power.
2. Governments artificially stimulate the money supply. The Fed created the right monetary conditions to spark a credit bubble, supported it with fiscal policies as well, such as tax cuts, first home grants (i.e. Australia), restrictions on land release (most Western countries). The financial crisis has the governments name on it. They have no idea how to manage an economy.
3. Lack of funding for regulation: Western governments around the world talk rhetorically about regulation, but have failed to improve the justice system, establish measures to disclose corruption, and under-funded the system.
4. Government has a duopoly: Yes, the two-party political system is a cozy duopoly, whereby the party in government appeases and is appeased by the media, banks and big biz to retain its cozy position. Consumers pay the costs; everyone else passes it through. Its all about unreasonable market power. This is not capitalism; its distortion of the principles upon which capitalism is based! Yes, that's right! Capitalism has a philosophical base. Its not just about making money. i.e. The concept of exchanging value for value; as opposed to extortion by banks, and other acts which involve courting favour with government. Markets are only as moral as the punters who participate in it. If you are morally ambivalent, don't expect the market to protect you. There is every reason to suggest you will lose your shirt because markets are not regulated. Or worse still, you will be paying for the imprudence of those who look to government for support. Why not just support a political system based on accountability and reason as the standard of value. Whose reason? Answer: Whose reality! The scientific, objective, readily observable one which keeps you awake at night!
The fact that the media is able to publish such nonsense suggests that they have a blatant conflict of interest in what they publish. Clearly they see themselves as having a cozy relationship with government. I would suggest these 'counterparties' have got together and said, "look you make us look good" and we will give you a cozy oligopoly along with News Corp, ABC, etc, just like we do the banks". It does not even need to be said, it need only be implied...just as you can train a fish to do tricks with positive reinforcement.
Andrew Sheldon www.sheldonthinks.com