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View Diary: Our Economy: MASSIVE FRAUD By Mortgage Industry. (269 comments)

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  •  Worth mentioning (8+ / 0-)

    The goal of life is living in agreement with nature. - Zeno

    by yellow dog in NJ on Wed Feb 25, 2009 at 04:10:07 PM PST

    •  Ironic, isn't it: (3+ / 0-)
      Recommended by:
      walkshills, gailwax, yellow dog in NJ

      On Friday, President Bush signed the Credit Rating Agency Reform Act of 2006, essentially opening up the credit rating industry to more competition, and abolishing the Securities and Exchange Commission's authority to designate credit-rating agencies as 'nationally recognized rating agencies (NRSROs).' Instead, a credit-rating company with three years of experience that meets certain standards would be allowed to register with the SEC as a "statistical ratings organization."

      The law also grants the SEC new authority to inspect credit-rating agencies, although the commission would have no say over their rating methodologies."

      "The dominant rating agencies failed millions of investors by neglecting to lower their ratings on Enron, WorldCom and other companies headed for bankruptcy, " said Alabama Republican Senator Richard Shelby, chairman of the Senate Banking Committee and sponsor of the legislation, after the bill was signed. "The absence of timely downgrades in these cases was a product of an industry that was beset by conflicts of interest and a lack of competition … Ultimately, this compromised the integrity of the market and investors paid the price," he concluded.

      (emphasis mine)

      Gee, how's that free market competition working now?  Keep drinking the KoolAid Mr. Shelby...

      Typical Republican thought process:  "Cause A) leads to B) Bad Outcome.  Therefore we need more of Cause A)."

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