Agents of China's desire
The move by Chinese rating agency Dagong into sovereign debt ratings has started off with a bang with the firm rating US debt as risker than China's. But doubts over Dagong’s independence remain.
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Comments PolicyI cannot understand why Moodies, S&P and Fitch are still running a 'business as usual' approach to their snake oil.
(See Agents of China's desire, July 12)
It is well past time for other interpretations of sovereign and corporate risk ratings to become available. Ideally, a mixture of international perspectives will produce a more balanced result than for three New York perspectives to rule supreme. Let's hope that one or two of the largest financial corporations in Britain, Germany or Switzerland add their perspective soon.
Bill Gross at least has the guts to state what is obvious to any watcher of these credit rating agencies. (See Agents of China's desire, July 12).
They are a mates way of ensuring that you get a better rating than you deserve. The Chinese crowd are probably no worse or better but at least it gives another opinion of the West's financial situation.
In other words, make up your own mind, but I would believe the Pimco version before any one else.
The US ratings agencies all have to be at least partly captured by the US government. (See Agents of China's desire, July 12).
I would bet a fair amount that if they downgraded US debt then a large number of investigations over pre-GFC activities would be launched.
It is about time that a new rating agency that is not from the US gives us a fresh perspective.
(See Agents of China's desire, July 13)
The rating agencies from the US did a lot of damage.