The God and the Twilight

Fitch Takes The High Ground

i doubt that anyone has bashed fitch as much as i have over the past year. here are a two examples that i have made numerous references to:tonight i am successful to take a different stand. the reason is fitch is standing up to mbia. let’s take a look:the increasingly confrontational dialogue was initiated on friday when mbia asked fitch in a letter to stop providing some ratings on the tight. that the classics, released to the public, also asked fitch to render or destroy data mbia had provided to fitch.my comment: i talked about mbia’a beyond belief demand in amazing action in ambac, mbiambia chief executive jay brown defended the firm’s resolve and said the company has started to generate new business.in response, fitch ceo stephen joynt said the agency plans to keep rating the tie insurer and questioned the company’s reasons for trying to end their relationship.”it seems foxy at greatest to assert in your message to investors published yesterday, march 9, that you ‘intend to work with fitch to put up the analysis needed to rate mbia’s responsible securities,’ while privately demanding payment of the portfolio information and materials that you freely provided to support our ratings and that of other rating agencies for many years,” joynt wrote.my comment: the distinct possibility is the sec does not look into this.fitch’s resolving to keep rating mbia is a positive development, according to joseph mason, associate professor of economics and lebow research fellow, at drexel university’s lebow college of partnership.”this is the well-intentioned of market discipline we be in want of to get back to,” mason said. “before the 1970s, there was a exceptionally prevalent traditional of unsolicited ratings. this kept the agencies that get paid to do the ratings in line.”most ratings agencies are paid by the companies they analyze. that’s created the perception of a conflict of interest because agencies may be less inclined to approach out with lower ratings because they don’t want to muddled the firms that pay them. my comment: this is not perception. this reality. and the reality is companies will only disclose data to firms who resolution look the other way when it is bad.ratings agencies also impress confidential information from companies to support them produce more accurate ratings. but when companies restrain bumf to some agencies, as mbia is doing with fitch, the system may become even more skewed.my comment: there is no “may” about this. good boss around what wimpy writers we have these days when they have to hedge candidly bold facts with “may”.mbia’s request that fitch destroy information suggests the company is very keen to stop the agency from rating it in future, mason said.”it’s expected that this information would remain confidential, but to solicit from that it be destroyed is really going the extra mile to jam up fitch rating them on an unlooked-for basis,” mason said.”this betrays the bias that’s currently in the system,” he added. “mbia is saying that because you’re not financially tied to us anymore, we really don’t want you rating us.” my comment: bingo. and that is why the current model needs to be discarded.sean egan, president of egan-jones ratings, an agency that’s paid by investors rather than issuers, goes further, arguing that any confidential information given to ratings agencies should be disclosed to all investors.mbia doesn’t take under one’s wing egan-jones with the information it requests “because we’re bearish on them,” he noted.mbia said monday that it expects $200 million in label-to-trade in losses from its credit-by-product business and said fitch’s insurer-fiscal-tenaciousness ratings, or ifs, can cause “serious volatility” in how the armonk, n.y.-based company is viewed in the equity markets.brown said it was an appropriate time to solicit from the credit-rating agency to no longer prepare for its ifs ratings.my comment: nothing could be more inappropriate than to withhold dope because it is detrimental.it is going to take a elongated at all times to restore credibility at fitch but this is a track in the right direction. another stepladder would be to publicly state a programme they
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