Wednesday, September 24, 2008

"Standard" is Very Poor

Dow Jones reports:
Standard & Poor’s Ratings Services cut its ratings on $25 billion in collateralized debt obligations, citing credit deterioration of residential mortgage-backed securities and stress in the U.S. residential mortgage market.

Welcome to the party, guys.

Seriously though, this is a self-fulfilling prophecy, and the ratings agencies are throwing gasoline on a fire that they helped start. There needs to be a temporary moratorium on credit rating reductions for at least several months. This would be much, much more effective than the stupid ban on short-selling that does little other than dry up liquidity and exempts market-makers, leaving the little guy holding the bag.

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