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everybody can use CDS data right now. And rating agencies have the right to publish their assesments.

However your defense of their irrational grading policy sounds unconvincing.

Their ratings is pure scam and unlike manipulations on CDS market their questionable rates stand exposed.

by FarEasterner on Tue Apr 27th, 2010 at 05:39:16 AM EST
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There is no regulated CDS market, it's all over the counter and dominated by about 5 issuers of CDS. CDS market players have resisted tooth and nail any suggestion of central clearinghouses for CDS, or any of a number of more intrusive regulatory suggestions such as requiring the delivery of a defaulted bond in order to collect the value of a CDS.

CDS issuers have been shown repeatedly to be inadequately capitalised to face an actual default on the underlying, which smells of a scam where CDS premiums are collected with no intention of paying up.

The brainless should not be in banking -- Willem Buiter

by Migeru (migeru at eurotrib dot com) on Tue Apr 27th, 2010 at 05:56:57 AM EST
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everybody can use CDS data right now.

Even if that were true, which as Mig points out below it isn't, capital market prices are completely worthless for estimating things about the real economy.

And rating agencies have the right to publish their assesments.

But they won't, because that would demonstrate to all the world that their ratings are advertising campaigns rather than serious analysis.

However your defense of their irrational grading policy sounds unconvincing.

I'm not defending it. I'm saying that bad as the ratings agencies undoubtedly are, the capital markets are even worse. So you can't use data from the capital markets to indict the rating agencies.

What you can use to indict the rating agencies is the fact that they've been wrong on any issue of any real importance that they have commented on. That is an indictment that matters.

The failure of their assessments to correlate with the whims of the capital markets is worth only a shrug, since the whims of the capital markets say nothing at all about the real economics of the activity they are supposed to reflect.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Apr 27th, 2010 at 10:03:04 AM EST
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