This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Ratings Agencies, Part 1: Experts or Charlatans?

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( Bullion Bulls Canada) -- I hate hypocrites. It's no secret. I've stated it on countless occasions in previous commentaries. Supposedly, the Western legal system (the literal "foundation" of our democracies) "hates hypocrites" as well.

To be specific, supposedly our legal systems don't allow a group of people to call themselves "experts" when they are pocketing fat fees for their analysis/assessment of the quality of complex financial products; and then to say "Just kidding. We're not experts, and no one should base any financial decision on our opinions" once such "opinions" have been shown to be severely flawed.

Then there is the United States of Crime. In the Land of Looting, we see the "double-standard" (i.e. blatant hypocrisy) enshrined as the highest ideal. On the one hand, cheap con-men (i.e. the privileged financial insiders in their expensive suits) can use the "rules of Justice" to hide behind -- irrespective of how fraudulent/absurd are their legal defenses. On the other hand, the victims of these sleazy shysters discover that (one by one) all of our legal protections are nothing but illusory anachronisms, simply erased whenever they threaten the interests of those same financial criminals.

There is no more blatant demonstration of "American Justice" at work than with respect to the fraudulent double standard which has been invented for the sole benefit of the Wall Street crime syndicate, and their accomplices -- the ratings agencies. The sham/scam is as simple as it is blatant. When someone sells something, they can get a higher price for it if there is some "warranty of quality assurance" or "verification of independent testing" to reassure potential buyers of the safety/security/suitability of the product in question.

Note the need for "independence." If Goldman Sachs is looking for another chump to buy a "mortgage-backed security" and it says to a potential buyer "our boys in 'quality control' have given this one their highest rating" (nudge, nudge, wink, wink), no sane buyer who is aware of Goldman Sachs' long track record of fraud would be reassured. However, when that same potential buyer is told that an independent group of experts has assessed this financial product as "AAA" then that buyer will reach for his check book.
1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%
YHOO $36.60 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs