Posted on 09/03/2010 7:06:29 AM PDT by SeekAndFind
The big three credit-rating agencies that totally missed the meltdown of the subprime mortgage market - Moody's, Standard & Poor's and Fitch - still give the United States a AAA credit rating. But there's a newcomer in the credit-rating game - Dagong Global Credit Rating - which has a very different view of the strength of U.S. finances.
Beijing-headquartered Dagong, the dominant credit agency in China, is pushing into international markets. This summer, it rated the sovereign debt of 50 nations making up 90 percent of the world's economy. While Americans still tend to regard U.S. Treasuries as the "safest investment in the world," Dagong gave our debt a mere AA - lower than that of 11 other countries (including China, which it awarded an AA+). To add insult to injury, the firm declared the U.S. outlook to be "negative."
Dagong has set off something of a hissy fit in the credit-rating world. "The Western rating agencies are politicized and highly ideological, and they do not adhere to objective standards," Chairman Guan Jianzhong told the Financial Times in July. The company also accused U.S. agencies, which share an oligopoly enforced by government fiat, of contributing to the 2007-08 financial crisis by applying the coveted AAA rating to loads of junk subprime mortgage debt.
The chairman of McGraw-Hill, owner of Standard and Poor's, accused Dagong of pandering to popular prejudice, insisting that S&P and the other agencies have been unfairly targeted by politicians, pundits and competitors. Also, he countered that Dagong lacks transparency in its policies and procedures.
(Excerpt) Read more at washingtontimes.com ...
From the Washington Times. Not a word of this will ever get reported by the State Controlled Media. And the average American will remain clueless.
It sounds like Dagong has it right.
“If Dagong is government controlled, I will have a lot of reasons to cast doubt on their ratings.”
Even if Dagong is government controlled, it can’t be any worse than here. Do you think Moody’s and the government aren’t working together?
Actually it is all the more reason to take them seriously. Shifting down the rating is part of that financial saber rattling that the Chinese are doing to exert pressure on us.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.