As the U.S. has just discovered, a wounded credit-rating agency is a dangerous beast.
On Dec 2010, the Securities Exchange Commission put into effect Rule 15c2-12 which prohibits dealers from underwriting most muni bond deals unless the issuers have contractually agreed to disclose annual…
“In December, projections by Meredith Whitney, the banking analyst, about possible municipal defaults began to rattle the $2.86 trillion municipal-debt market. Investors withdrew $1.2 billion from U.S. municipal-bond mutual funds,…
“The rule on staying alive as a forecaster is to give ’em a number or give ’em a date, but never give ’em both at once.”
Peter Demirali is a portfolio manager and heads Cumberland’s taxable fixed income area and is a long time veteran of taxable fixed income markets. He is a member of Cumberland…
Smart Money magazine and the NY Times reported on the NYC American Folk Arts museum that went bankrupt by defaulting on its muni bonds in Mid August 2010.
Japan’s has begun severing the global vice grip of the 3 major credit raters. Make no mistake, the “Keystone Cops” ( Moodys, S&P and Fitch) once powerful influence over nations,…
The FINREG bill signed into law this week is already creating economic casualties and a complete standstill for new bond issuance.
Credit raters judge risk & value and were given special limited liability privileges because investors and markets crave their expert opinions. Ideally they provide an objective baseline for consistent rating…