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Indian behind US downgrade SPEAKS out!


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Bill George
Credit rating agencies are a joke
by Bill George on Aug 10, 2011 07:50 AM  | Hide replies

Credit rating agencies like S&P, Moodys, Fitch, D&B have a virtual monopoly. Competition in the industry is nearly non-existent. The Federal government bestowed the first three with National Recognition (NRSRO) 40 years ago, but now irrelevant.

A serious conflict of interest developed, where these agencies are paid by debtors to rate the debt they issue. Imagine a construction project where the inspector is paid by the builder instead of the client or an education system where instead of the university, the students directly pay the evaluator. Such a thing could work, provided transparency and a system of checks and balances are established clearly.

In the great crash of 2008, many credit agencies were late to realize the horrible quality of the debt they had rated as AAA. They were caught with their hands in the cookie jar, with their pants down. In a rush, they downgraded GSEs like Fannie, Freddie and corporations like AIG, Lehman after they went bankrupt - which beats the purpose of such an agency in the first place.

US national debt is sovereign. Just like the debt of any nation that issues fiat currency, the Federal government can borrow US Dollars at will from its central bank with no collateral. The only limitation is an artificial debt ceiling limit set by Congress. No government in history has ever repaid its debt in full except by inflating the money supply. S&P made major miscalculations on US debt.

Now, does it matter what ethnicity the CEO of S&a

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anirban bandyopadhyay
Re: Credit rating agencies are a joke
by anirban bandyopadhyay on Aug 23, 2011 10:19 AM

How much money US embassy pays you? Do you think Indians are as fool as Indian politician like Man Mohan Singh?


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R Bose
Headline very mischievous, damaging
by R Bose on Aug 10, 2011 07:37 AM  | Hide replies

The title of the so-called news item "Indian behind US downgrade SPEAKS out!" is in extremely bad taste. Why bring up caste, creed, religion, or nationality when reporting news?

SO WHAT if he happens to be Indian. A CEO of any origin would have done the same thing in his place. It was his job, man!

Shame on Rediff for such bad taste, stooping to such low levels, creating such bad precedence in journalism.


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C P
Re: Headline very mischievous, damaging
by C P on Aug 11, 2011 02:01 AM
Because indian have nothing else to show for.

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tillu tillu
inside news...
by tillu tillu on Aug 10, 2011 05:29 AM  | Hide replies

Deven got tipped off from immigration, he will be deported soon hence this act. Its an organization but the CEO is the one who makes the decisions and give the go-ahead. This is the reason CEO's get paid way too much. I am sure he is from north what else one can expect!

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Solnishka
Re: inside news...
by Solnishka on Aug 10, 2011 07:33 AM
do you make any sense m0r0n?

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Siru Thurumbu
What a moronic heading
by Siru Thurumbu on Aug 10, 2011 12:19 AM  | Hide replies

The downgrade was imminent based on various factors. Deven Sharma did not have a grudge against USA. The whole idea that US had a AAA rating all along is laughable.

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Solnishka
Re: What a moronic heading
by Solnishka on Aug 10, 2011 07:34 AM
laughable? Thats the only country that did not default in the past 60 years.

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Pravin bhai
THE TOPIC IS VERY CHEAP AND MISCHIEVIOUS.
by Pravin bhai on Aug 09, 2011 11:18 PM  | Hide replies

THIS TOPIC IS VERY , CHEAP AND MISCHIVIOUS. AS IF A PAKISTANI WANTS TO PIT AN AMERICAN AGAINST AN INDIA.

This guy is an elite economist, works with a US company and seems they have helped US to delay this down grading upto AA .

US Economy is in worst state and needs a strong overhaul.

This is a cheap topic showing the standard of the news service called rediff.

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Noshir Daruwala
Re: THE TOPIC IS VERY CHEAP AND MISCHIEVIOUS.
by Noshir Daruwala on Aug 09, 2011 11:23 PM
Sir, who says rediff is a commendable "news service " ? It is a low grade provicial level media and people visit it to write their Bhadaas, nothing special about this rediff. We have seen it with a propakistani topics and also hate-cricket-India topics too...

Dont take it seriously. Just use the opportunity to interact with others, or if you are a muslim you can hit hindus and vis-a-vis...

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Rahim Baba
Re: Re: THE TOPIC IS VERY CHEAP AND MISCHIEVIOUS.
by Rahim Baba on Aug 09, 2011 11:28 PM

I agree with you Noshirbhai. Rediff is a 3rd level misguider. Many of their topics have been taken off after readers complained the authenticity and reality of the subject.

This will go too, just watch.

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Ravi
Not Just one man decision
by Ravi on Aug 09, 2011 07:22 PM

Acknowledging the fact that Mr Deven is president of S&P when it made the downgrading of US in general, its highly incorrect to focus just one individual for the decision taken by it. The rating process is extensive and lots of factors are considered by many experts based on the grounf realities and working scientifically on the models being used to determine the rating. Its a collective decision by the agency. And teh fact that the downgrading shoudl have happened long back is being ignored by us conveniently. Better late than never. Also it doesnt mean that US has become bankrupt.
In all the practical conditions it is still the big player in the world market and its authority in money power and other areas cannot be ignored. May be its a wakeup call for US administrators to stop spending its resources on wars and other interfering activities and funding countries like Pakistan which totally misuse those funds. Its time for US to be more prudent now.
Positives have to be taken from this downgrading. It helps teh US more than anybody else if it takes this new reality with a pinch of salt.

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guru
Individual
by guru on Aug 09, 2011 01:42 PM

Are we trying to read too much? Devan Sharma, just like any other individual, is part of S&P and deciding(speaking) on behalf his organization period.

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pradeep agarwal
His days are numbered if what Obama said matters
by pradeep agarwal on Aug 09, 2011 12:23 PM  | Hide replies

Sharma has overplayed his card & seems be trying to make peace with President Obama by acclaiming his statement on trade deficit.None can stay at job job in US after being rebuked directly by President.His company seems to have dubious distinction of causing meltdown by not reporting sub prime in 2007 to the extent & seems to have made another mistake by being over cautious this time when situation was not that bad.

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Solnishka
Re: His days are numbered if what Obama said matters
by Solnishka on Aug 10, 2011 07:37 AM
This is not some sundry country where there is no law. This is the US of A. If the President or the Feds feel that there is injustice being done to them then they will go to court and decisively prove it with evidence.

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Manoj Dev
Lesson for investors from crash
by Manoj Dev on Aug 09, 2011 11:59 AM

In good faith people buy & sell equities at the advice of brokers. The credit rating agencies' advice give credence to brokers' advice. Initially new investors make money and are encouraged to put in more. Then after a few years a cyclic mini stock-market crash happens which wipes away the gains. In the process, the broker gets richer because he only buys out the investor's stocks.

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Oldkid
Get ready for doom
by Oldkid on Aug 09, 2011 11:43 AM  | Hide replies

How could anyone imagine the US could bury the previous recession by infusing trillions of funds into financial markets during 2008. It's only by either borrowing again or printing excess money resulting in inflation. Days are not so far for the current crisis to unleash its actual wrath with a more intense battering of the global markets to butcher everyone on the streets. More financial institutions will bite the dust taking the world economy to the brink of collapsing by mid of next year. No amount of Fed rate cuts or bailout packages can salvage the US economy from plunging into poverty. The crisis is going to be more painful and worse than the subprime crisis of US. Mark my words. - Prof AsgarJamal Daruwala (Retd)

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Solnishka
Re: Get ready for doom
by Solnishka on Aug 10, 2011 07:39 AM
If that happens (God forbid) then the oldkids and the new kids all over the world will be crawling on the streets ............. mark these words too ......

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