Tuesday, July 17, 2012

The Growing Police State: Credit Ratings Edition

Oh.  This will end well.  It appears the Federal Government is now going to be "overseeing" the Credit Reporting agencies.  Those would be the agencies which assess how risky it is to loan various entities, from private citizens, to corporations, to governments, money.  Yes, those people who downgraded, and then (under vast political pressure) re-upgraded US Debt.

Does the term "conflict of interest" have know meaning to these people?  How about "Tyranny?"

The Orwellian Named "Consumer Financial Protection Bureau" said, Monday, that it would begin supervising the top 30 firms that make up approximately 94% of the Credit Rating industry.  Of course, this is to make things more "fair" to "consumers."

Nevermind that credit rating agencies already have every incentive- just from the market place- to get the right answers regarding creditworthiness.  If they err too often on the side of lending money, no one will trust them and they'll all go back to doing their own underwriting.  That, or new agencies which get it right more often will arise.  If the err too often on the side of not lending money, the same thing will happen.  Banks and other lenders use the Credit Reporting agencies out of convenience, not necessity.

No, the only reason for this move is to prevent further embarrassment to national governments, or government agencies, from having their credit ratings downgraded.  This is a bald-faced threat.  This is a statement, "Remember who controls you."  Or, perhaps, "I'm altering the deal.  Pray I do not alter it futher."

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