ramanan50

Rating Agencies ‘Rate’ for A Consideration. ABC News.

In consumer forum on March 4, 2012 at 12:14

People, especially in the Finance Sector,so-called Financial Analysts and Stick Market buffs rely on Rating of Agencies.

The Government also relies too much on these Agencies’ Rating System.

When Standard & Poor‘s down graded US credit Rating, the US Policy makers were furious.

Logo of Standard and Poor's

Standard & Poor's

“The latest Fed action is based on the AAA rating of collateral eligible to receive Fed financing: it will not accept mortgage-backed securities that credit rating agencies (CRAs) have put under review for possible downgrades. This raises again the key role of CRAs, on which the market has long relied for guidance on the credit standing of investments.”

http://www.alacrastore.com/storecontent/oxford/DB141230

Better Business Bureau Logo

One of the executives( India) of a credit Rating Agency was fired for down grading US Rating!

These Agencies are prone to Lobby pressure and they do their bidding.

Their rating not withstanding many countries prosper-currency of Papua New Guinea emerged stronger after down grading!

No point is listening to these ratings.

I know of many companies with a good Crisil( a credit rating agency in India) rating buckle under with in a months of good rating!

The rising price of stocks are determined by a cartel and Rating by another cartel,in this case by Countries like the US.

Now, read a scam unearthed by ABC news How A consumer Rating Agency gave a good rating for a non-existent terrorist  company.

The Better Business Bureau, one of the country’s best known consumer watchdog groups, is being accused by business owners of running a “pay for play” scheme in which A plus ratings are awarded to those who pay membership fees, and F ratings used to punish those who don’t.

To prove the point, a group of Los Angeles business owners paid $425 to the Better Business Bureau and were able to obtain an A minus grade for a non-existent company called Hamas, named after the Middle Eastern terror group.

“Right now, this rating system is really unworthy of consumer trust or confidence,” said Connecticut attorney general Richard Blumenthal in an interview to be broadcast as part of an ABC News investigation airing tonight on 20/20.

In an official demand letter sent to the national headquarters of the Better Business Bureau Thursday, Blumenthal called on the BBB to stop using its grading system, which he said was “potentially harmful and misleading” to consumers.

http://abcnews.go.com/Blotter/business-bureau-best-ratings-money-buy/story?id=12123843#.T1MCnofxp4M

See Connecticut Attorney general’s Letter.(Click Link)

http://abcnews.go.com/Blotter/page?id=12132519

With endorsements from officials and bribes by the Companies, these Credit Companies mislead people in General and Countries in particular to suit US.

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