Comments on: How the SEC seems set to fix the ratings impasse http://blogs.reuters.com/felix-salmon/2010/07/23/how-the-sec-seems-set-to-fix-the-ratings-impasse/ A slice of lime in the soda Sat, 18 May 2013 23:43:55 +0000 hourly 1 http://wordpress.org/?v=3.4.2 By: KenInIL http://blogs.reuters.com/felix-salmon/2010/07/23/how-the-sec-seems-set-to-fix-the-ratings-impasse/comment-page-1/#comment-17027 KenInIL Sun, 25 Jul 2010 15:40:49 +0000 http://blogs.reuters.com/felix-salmon/?p=4839#comment-17027 Any chance the rule change will be permanent? That would likely mean that ratings-agency business will disappear, at least in its current form. But since the consensus seems to be that the ratings had become unreliable or even meaningless, that's what one would expect anyway. Any chance the rule change will be permanent? That would likely mean that ratings-agency business will disappear, at least in its current form. But since the consensus seems to be that the ratings had become unreliable or even meaningless, that’s what one would expect anyway.

]]> By: shrivti1 http://blogs.reuters.com/felix-salmon/2010/07/23/how-the-sec-seems-set-to-fix-the-ratings-impasse/comment-page-1/#comment-17020 shrivti1 Sat, 24 Jul 2010 18:03:03 +0000 http://blogs.reuters.com/felix-salmon/?p=4839#comment-17020 144a will not be able to handle even the reduced post-2008 volume of SF deals. Increasing incentives for accuracy through threat of litigation was the purpose of this legislation, and it will likely have the effect of reducing the volume of deals, or making them marginally more expensive (which might price some people out of the market). This, I argue, is a good thing, because the deals that are left will in theory be more reliable (because the ratings behind them are more accurate). Less available credit that is more reliable and stable is the whole point of reform. I think those crying about contracting credit availability and more expensive financing do not yet fully understand the degree to which risk was underpriced in the last decade. 144a will not be able to handle even the reduced post-2008 volume of SF deals. Increasing incentives for accuracy through threat of litigation was the purpose of this legislation, and it will likely have the effect of reducing the volume of deals, or making them marginally more expensive (which might price some people out of the market).

This, I argue, is a good thing, because the deals that are left will in theory be more reliable (because the ratings behind them are more accurate). Less available credit that is more reliable and stable is the whole point of reform. I think those crying about contracting credit availability and more expensive financing do not yet fully understand the degree to which risk was underpriced in the last decade.

]]> By: itserich http://blogs.reuters.com/felix-salmon/2010/07/23/how-the-sec-seems-set-to-fix-the-ratings-impasse/comment-page-1/#comment-16989 itserich Fri, 23 Jul 2010 16:00:59 +0000 http://blogs.reuters.com/felix-salmon/?p=4839#comment-16989 I do not think it could matter. Retail investors do not have access to ABS. Surely that market will be able to come up with its own disclosure. The best it will do is unemploy some corporate lawyers and let the SEC move on to other things. Still, GM announced a plan to buy AmeriCredit yesterday. I am guessing in reality there is not much concern about this issue. I do not think it could matter. Retail investors do not have access to ABS. Surely that market will be able to come up with its own disclosure. The best it will do is unemploy some corporate lawyers and let the SEC move on to other things.

Still, GM announced a plan to buy AmeriCredit yesterday.

I am guessing in reality there is not much concern about this issue.

]]> By: gringcorp http://blogs.reuters.com/felix-salmon/2010/07/23/how-the-sec-seems-set-to-fix-the-ratings-impasse/comment-page-1/#comment-16986 gringcorp Fri, 23 Jul 2010 12:31:36 +0000 http://blogs.reuters.com/felix-salmon/?p=4839#comment-16986 If you thought securitization was a clubby world ripe for manipulation before the crash, just wait until it goes private and no-one has to file those lovely prospectuses that Michael Burry could get on 10k wizard for $100 per year. You can get the odd deal done in the 144A market, but it will act as a limiter on the volume of deals that an issuer can get done. You might see that as a feature rather than a bug, however. If you thought securitization was a clubby world ripe for manipulation before the crash, just wait until it goes private and no-one has to file those lovely prospectuses that Michael Burry could get on 10k wizard for $100 per year. You can get the odd deal done in the 144A market, but it will act as a limiter on the volume of deals that an issuer can get done. You might see that as a feature rather than a bug, however.

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