Using Veritas to Construct the "Per…

29-04-2017 Hits:87197 BoomBustBlog Reggie Middleton

Using Veritas to Construct the "Perfect" Digital Investment Portfolio" & How to Value "Hard to Value" tokens, Pt 1

The golden grail of investing is to find that investable asset that provides the greatest reward with the least risk. Alas, despite how commonsensical that precept seems to be, many...

Read more

The Veritas 2017 Token Offering Summary …

15-04-2017 Hits:81117 BoomBustBlog Reggie Middleton

The Veritas 2017 Token Offering Summary Available For Download and Sharing

The Veritas Offering Summary is now available for download, which packs all the information about Veritas in a single page. A step by step guide to purchasing Veritas can be downloaded here.

Read more

What Happens When the Fund Fee Fight Hit…

10-04-2017 Hits:80958 BoomBustBlog Reggie Middleton

What Happens When the Fund Fee Fight Hits the Blockchain

A hedge fund recently made news by securitizing its LP units as Ethereum-based tokens and selling them as tradeable (thereby liquid) assets. This brings technology to the VC industry that...

Read more

Veritaseum: The ICO That's Ushering in t…

07-04-2017 Hits:85430 BoomBustBlog Reggie Middleton

Veritaseum: The ICO That's Ushering in the Era of P2P Capital Markets

Veritaseum is in the process of building peer-to-peer capital markets that enable financial and value market participants to deal directly with each other on a counterparty risk-free basis in lieu...

Read more

This Is Ground Zero for the 2017 Veritas…

03-04-2017 Hits:81930 BoomBustBlog Reggie Middleton

This Is Ground Zero for the 2017 Veritas Offering. Are You Ready to Get Your Key to the P2P Capital Markets?

This is the link to the Veritas Crowdsale landing page. Here is where you will be able to buy the Veritas ICO when it is launched in mid-April. Below, please...

Read more

What is the Value Proposition For Verita…

01-04-2017 Hits:84117 BoomBustBlog Reggie Middleton

What is the Value Proposition For Veritas, Veritaseum's Software Token?

 A YouTube commenter asked a very good question that we will like to take some time to answer. The question was, verbatim: I've watched your video and gone through the slides. The exchange...

Read more

This Real Estate Bubble, Like Some Relat…

28-03-2017 Hits:55178 BoomBustBlog Reggie Middleton

This Real Estate Bubble, Like Some Relationships, Is Complicated...

CNBC reports US home prices rise 5.9 percent to 31-month high in January according to S&P CoreLogic Case-Shiller. This puts the 20 city index close to an all time high, including...

Read more

Bloomberg Chimes In With My Warnings As …

28-03-2017 Hits:83375 BoomBustBlog Reggie Middleton

Bloomberg Chimes In With My Warnings As Landlords Offer First Time Ever Concessions to Retail Renters

Over the last quarter I've been warning about the significant weakness in retailers and the retail real estate that most occupy (links supplied below). Now, Bloomberg reports: Manhattan Landlords Are Offering...

Read more

Our Apple Analysis This Week - This Comp…

27-03-2017 Hits:83113 BoomBustBlog Reggie Middleton

Our Apple Analysis This Week - This Company Is Not What Most Think It IS

We will releasing our Apple forensic analysis and valuation this week for subscribers (click here to subscribe - lowest tier is the same as a Netflix subscription). As can be...

Read more

The Country's First Newly Elected Lame D…

27-03-2017 Hits:83005 BoomBustBlog Reggie Middleton

The Country's First Newly Elected Lame Duck President Will Cause Massive Reversal Of Speculative Gains

Note: Subscribers should reference  the paywall material here for stocks that should give a good risk/reward scenario for bearish trades. The Trump administration's legislative outlook is effectively a political desert, with...

Read more

Sears Finally Throws In The Towel Exactl…

22-03-2017 Hits:89257 BoomBustBlog Reggie Middleton

Sears Finally Throws In The Towel Exactly When I Predicted "has ‘substantial doubt’ about its future"

My prediction of Sears collapsing once interest rates started ticking upwards was absolutely on point.

Read more

The Transformation of Television in Amer…

21-03-2017 Hits:86979 BoomBustBlog Reggie Middleton

The Transformation of Television in America and Worldwide

TV has changed more in the past 10 years than it has since it's inception nearly 100 years ago This change is profound, and the primary benefactors look and act...

Read more

I could have sworn that I posted I was taken small positions against the publicly rated ratings agencies a month or so ago, but when I searched for the post to comment on it I couldn't find it. My apologies. Well, it seems as if the chickens have come home to roost for this group, and none too soon if I have anything to say about.

I have written alot about these clowns, you can search my site for the term "ratings agencies' for a list, but a picture (or two) is worth a thousand words (from A Super Scary Halloween Tale of 104 Basis Points Pt I & II, by Reggie Middleton)...

As usual, you can click on any graph to enlarge it.

And then...

Now, on to the latest Bloomberg article on the topic: Moody's, S&P, Fitch Face Hearings on Role of Securities Ratings in Crisis

Moody’s Investors Service, Standard & Poor’s and Fitch Ratings face scrutiny today by insurance regulators examining the role of the firms in evaluating fixed- income securities.

State insurance regulators are meeting in Maryland to examine the firms’ role in rating bonds held by insurance companies. A second hearing scheduled today, by Edolphus Towns, chairman of the House Oversight and Government Reform Committee, was postponed to Sept. 30 (Brooklyn's about to get' em. The Congressman is looking into Lewis at BofA, and by exension probably Paulson as well). The panel will look at ratings companies amid allegations of continued conflicts of interest from a former Moody’s analyst.

The three companies have been criticized by investors and lawmakers including Senate Banking Committee Chairman Christopher Dodd, who said they wrongly assigned top credit rankings to U.S. subprime-mortgage bonds just before that market collapsed in 2007. Subprime mortgages helped spark a housing- price collapse that contributed to a worldwide financial crisis.

“2008 showed us that bond ratings can give people a false sense of security,” said Mark MacQueen, who helps oversee $7.5 billion in debt at Sage Advisory Services Ltd. in Austin, Texas. “I don’t put a lot of weight in the ratings.”Just don't put a lot of weight in conflicted companies.

Insurance regulators may move to place less emphasis on the ratings of the big three firms. Yesterday, the National Association of Insurance Commissioners approved Realpoint LLC to evaluate commercial mortgage-backed securities. The NAIC said it is reviewing whether to create a non-profit bond-rating firm. Damn good idea..

Bar ‘Always Moving’

“The fundamental issue is if the bar is always moving, that makes it very difficult,” Connecticut insurance Commissioner Thomas Sullivan said in a telephone interview. “Magically overnight, what we thought was AAA is no longer AAA. That’s a big problem.” Actually, what you thought was AAA was never AAA to begin with.

David Teicher, managing director at New York-based Moody’s, said in prepared remarks the company has been concerned that the use of ratings for the oversight of regulated entities “can adversely affect the behavior of market participants” and regulators.

“We have learned hard lessons,” said Grace Osborne, managing director at S&P, in prepared remarks. “We, along with many other market participants and regulators, never expected such severe, negative performance in the housing and mortgage markets.”Yeah right!!! You have 100 times the staff and budget that I do, and I saw it coming a mile away. What was the difference? I wasn't paid by the guys I was rating!!!!

Fitch group managing director Keith Buckley said ratings “have been used constructively” in a regulated environment. “From a regulatory point of view,” he said in prepared remarks, “the question of what would be used in place of credit ratings is rarely answered satisfactorily.”

Regulations

Regulators such as the Securities and Exchange Commission use “nationally recognized statistical ratings organizations” to judge the safety of bonds held by insurance companies or money market funds. S&P, Moody’s and Fitch are the largest such rating companies. They’ll be represented at the Maryland hearing today, as will Dominion Bond Rating Service Ltd., the NAIC said in a statement last week.

Sullivan is a member of the NAIC’s rating working group. James Wrynn, New York’s insurance commissioner, and Michael McRaith of Illinois are also on the committee.

Caroline Creighton, a spokeswoman at DBRS, didn’t immediately return a call for comment.

Moody’s originally declined to participate in the meeting but relented after New York’s regulator suggested scaling back the rating firm’s authorization if it skipped the session.

Congressional Hearing

The congressional hearing was postponed after the panel obtained an internal Moody’s staff memo written by Eric Kolchinsky, a former analyst at the firm, expressing his concern with how the company rated securities, said committee chairman Edolphus Towns. The panel didn’t have enough time to incorporate the information into the hearing, he said.

A Moody’s representative was invited to the session but didn’t come, Towns said.

“They basically didn’t show up, they ignored us” Towns said in an interview, referring to Moody’s. “I guess they didn’t realize we have subpoena power.”

The hearing was rescheduled to Sept. 30 at 10 a.m. in Washington.

“Moody’s has participated in numerous Congressional and other hearings, and intends to continue the ongoing dialogue it maintains with legislators, regulators and other market participants,” the company said in an e-mailed statement. “Moody’s will respectfully consider any request to appear at the rescheduled hearing.”

Losing Authorization

Insurers can hold certain securities without explicit regulatory approval if those investments are rated by an authorized firm. Losing authorization could mean less business, Hampton Finer, New York’s deputy superintendent, said last week.

Congressional leaders should look to reduce the reliance on ratings, New York University Stern School of Business professor Lawrence White said in prepared testimony for the House panel.

“Eliminate all regulatory reliance on ratings,” White said in prepared remarks. “The bond information market would be opened to new ideas and new entry in a way that has not been possible for over 70 years.”

The ratings companies haven’t resolved conflicts of interest and a lack of independence that contributed to the financial crisis and may cause more turmoil, according to Kolchinsky, the former Moody’s analyhst.

“Senior management still favors revenue generation over ratings quality and is willing to dismiss or silence those employees who disagree with these unwritten policies,” Kolchinsky said in prepared testimony.

Kolchinsky said he worked at Moody’s before being suspended for speaking up about alleged securities-law violations at the company. His testimony was to join that of White; Floyd Abrams, an attorney at Cahill Gordon & Reindel LLP; and Joseph Dear, chief investment officer for the California Public Employees’ Retirement System.