In Parts One and Two I addressed the favored status of the ratings agencies in affecting all manner of financial instruments and investment decisions. But now, as an outgrowth of Dodd-Frank, the agencies’ impact appears to be on the wane. The new OCC regulations are figuratively airbrushing the ratings agencies out of the financial landscape. My third post on the agencies addresses the final insult, as the private sector snubs them.

The shenanigans that Moody’s and Standard and Poor’s pulled in the two years leading up to their massive ratings downgrades of 3Q 2007, have come home to roost.  At the same time that Dodd-Frank has smacked them down, it appears Wall Street is also now beginning to ignore them.  [In fact, one might wonder if legislative comeuppance was even necessary, inasmuch as the agencies are now receiving less and less attention from the very industry upon which their existence relies.  In short, it appears that we are witnessing a sort of Darwinian result, akin to what happened to the dinosaurs, who simply got too big for their own good. – PCQ] Continue reading “Ratings Agencies Get Their Comeuppance – They’ve Been Downgraded! [Part Three]”