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The Weekend Waits

This is Satisfied from the new album Bad as Me.

The video is directed by Jesse Dylan. and looks as if every expense has been spared (unless a back garden and a strobe light don’t come cheap!)

When I’m gone
When I’m gone

Roll my vertebrae out like dice
Let my skull be a home for the mice
Let me bleach like the bones on a beach
I’ll be hard like a pit from a peach
Now the ground has a branch
Now the hound has a ranch
The old tressel’s just junk
The Edsel is on blocks
The old said so… won’t talk
I’m a blimp that’s straining, cut’er ties
I’m a moth in training, flutter by
Huh…

When I’m gone
When I’m gone

I said I will have satisfaction
I will be satisfied
I said I will be satisfied
When I’m believing: satisfaction
When I’m grieving: satisfaction
When I’m shaking: satisfaction
When I’m praying: satisfaction
When I’m staying: satisfaction
When I’m carousing
When I’m a thousand

I said I will have satisfaction
I will be satisfied
Before I’m gone
Before I’m gone
I will have satisfaction
I will be satisfied
I will have satisfaction
I will be satisfied

Now Mr. Jagger and Mr. Richards
I will scratch where I’ve been itching
Now Mr. Jagger and Mr. Richards
I will scratch where I’ve been itching

Before I’m gone
Before I’m gone
Before I’m gone
Before I’m gone

Let me go back into the barrel
Let the bullet go back into the barrel
Let the bullet go back into the barrel
Let the bullet go back into the barrel
Before I’m gone
Before I’m gone

I said I will have satisfaction
Let the bullet go back into the barrel
Let the bullet go back into the barrel
Take a left off the straight and the narrow
Let the bullet go back into the barrel
Before I’m gone

What now?

The current mess that the single European currency is in was not difficult to predict. Trying to foretell what is going to happen now is just a bit more tricky. The only thing that’s certain is that things are going to get worse, much worse before they get better.

The time for decisive action was probably six months ago when the euro could have been made two tier or the countries in trouble could have had a devalued internal currency and still traded in the euro. It might not have worked but it was really the only chance of avoiding where we are now.

Instead the eurozone countries clung on to the wreckage of a failed ideology and tried to keep it afloat.

Man the submarines.

Poor Standards

It turns out that yesterday’s Standard and Poor’s downgrading of France’s credit rating was a ‘glitch’.

WHAT?

A private company based in the United States has a ‘glitch’ and all of a sudden France is drawn into the contagion sweeping the Euro zone?

That’s about the size of it.

Here is the Standard and Poor’s map of the world in August 2011:

The ratings are explained thus and I have expanded my vocabulary by one word by reading it. I think I know what an obligor is now.

The company rates borrowers on a scale from AAA to D. Intermediate ratings are offered at each level between AA and CCC (e.g., BBB+, BBB and BBB-). For some borrowers, the company may also offer guidance (termed a “credit watch”) as to whether it is likely to be upgraded (positive), downgraded (negative) or uncertain (neutral).

Investment Grade

AAA: An obligor rated ‘AAA’ has extremely strong capacity to meet its financial commitments. ‘AAA’ is the highest issuer credit rating assigned by Standard & Poor’s.
AA: An obligor rated ‘AA’ has very strong capacity to meet its financial commitments. It differs from the highest-rated obligors only to a small degree. Includes:
AA+: equivalent to Moody’s Aa1 (high quality, with very low credit risk, but susceptibility to long-term risks appears somewhat greater)
AA: equivalent to Aa2
AA-: equivalent to Aa3
A: An obligor rated ‘A’ has strong capacity to meet its financial commitments but is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligors in higher-rated categories.
A+: equivalent to A1
A: equivalent to A2
BBB: An obligor rated ‘BBB’ has adequate capacity to meet its financial commitments. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitments.

Non-Investment Grade (also known as junk bonds)

BB: An obligor rated ‘BB’ is less vulnerable in the near term than other lower-rated obligors. However, it faces major ongoing uncertainties and exposure to adverse business, financial, or economic conditions, which could lead to the obligor’s inadequate capacity to meet its financial commitments.
B: An obligor rated ‘B’ is more vulnerable than the obligors rated ‘BB’, but the obligor currently has the capacity to meet its financial commitments. Adverse business, financial, or economic conditions will likely impair the obligor’s capacity or willingness to meet its financial commitments.
CCC: An obligor rated ‘CCC’ is currently vulnerable, and is dependent upon favorable business, financial, and economic conditions to meet its financial commitments.
CC: An obligor rated ‘CC’ is currently highly vulnerable.
C: highly vulnerable, perhaps in bankruptcy or in arrears but still continuing to pay out on obligations
CI: past due on interest
R: An obligor rated ‘R’ is under regulatory supervision owing to its financial condition. During the pendency of the regulatory supervision, the regulators may have the power to favour one class of obligations over others or pay some obligations and not others.
SD: has selectively defaulted on some obligations
D: has defaulted on obligations and S&P believes that it will generally default on most or all obligations
NR: not rated

The company traces its history back to 1860, with the publication by Henry Varnum Poor of History of Railroads and Canals in the United States. This book was an attempt to compile comprehensive information about the financial and operational state of U.S. railroad companies. Henry Varnum went on to establish H.V. and H.W. Poor Co. with his son, Henry William, and published annually updated versions of this book.

In 1906, Luther Lee Blake founded the Standard Statistics Bureau, with the view to providing financial information on non-railroad companies. Instead of an annually published book, Standard Statistics would use 5″ x 7″ cards, allowing for more frequent updates.

In 1941, Poor and Standard Statistics merged to become Standard & Poor’s Corp. In 1966, the company was acquired by The McGraw-Hill Companies, and now encompasses the Financial Services division.

The company’s website is here

Standard and Poor's react to the global financial crisis.

CRAs such as S&P have been subject to criticism in the wake of large losses beginning in 2007 in the collateralized debt obligation (CDO) market that occurred despite being assigned top ratings by the CRAs.

Credit ratings of AAA (the highest rating available) were given to large portions of even the riskiest pools of loans. Investors trusting the low-risk profile that AAA implies, purchased large amounts of CDOs that later became unsaleable. Those that could be sold often took staggering losses. For instance, losses on $340.7 million worth of CDOs issued by Credit Suisse Group added up to about $125 million, despite being rated AAA by S&P.

Companies pay S&P to rate their debt issues. As a result, some critics have contended that S&P is beholden to these issuers and that its ratings are not as objective as they ought to be and that, in fact, this “pay to play” model makes their ratings meaningless at best and perhaps would more accurately be compared to the role of the “shill” in a game of three card monte.

In April 2009, the company called for “new faces” in the Irish government, which was seen as interfering in the democratic process. In a subsequent statement they said they were “misunderstood”.

Some critics have pointed out that the company and other rating agencies were part of the cause of the global financial crisis of 2008–2009, for example when Moody’s downgraded Freddie Mac or, to quote Time, when “both agencies granted AAA rating to Collateralized Debt Obligations (CDOs) that were chock-full-of crap mortgages, thereby helping to precipitate the 2008 financial collapse”). Ezra Klein wrote for The Washington Post that “Standard Poor’s didn’t just miss the bubble. They helped cause it,” but he said S&P took the right action to downgrade the U.S. On the other hand, Paul Krugman wrote, “it’s hard to think of anyone less qualified to pass judgment on America than the rating agencies,” and, “S&P’s demands suggest that it’s talking nonsense about the US fiscal situation”. Perhaps more revealing and supportive of Paul Krugman’s comment, David Wyss, who was chief economist at S&P till July 2011 noted to a reporter on August 17, 2011: “The credit agencies don’t know any more about government budgets than the guy in the street who is reading the newspaper.” Such insider comments lay fresh doubts about the key ratings decisions by S&P. And, in a recent Wall Street Journal article, Mark Adelson, S&P’s chief credit officer since June 2008, openly decried the quality of S&P analysis and analysts; yet the majority of them (including Clifford Griep, the former chief credit risk officer) remain employed by S&P. While Mark Adelson reviewed and edited the U.S. downgrade notice, he did not really question the reasoning, nor spot the $2 trillion error in the computations. Furthermore, on August 6, 2011, the CEO Deven Sharma publicly stated that he had no prior knowledge that such a rating change was even in the works for the prior day, but quickly went on to defend the move; in a surprise development, Deven Sharma left S&P in early September amid mounting criticism of the firm’s ratings and research.

With the US downgrade some have accused S&P of causing further damage for its own agenda. S&P acknowledged making a USD$2 trillion error in its justification for downgrading the US credit rating, but stated that it “had no impact on the rating decision”. “A judgment flawed by a $2 trillion error speaks for itself,” said a spokesman for the United States Department of the Treasury.

The SEC is investigating whether the intent to downgrade the U.S. was leaked prior to the public announcement, since the stock market fell sharply for no apparent reason a day earlier, fed by rumors of an impending downgrade. Another issue that has concerned commentators is that an S&P rating — for example, of the US government or any other national government — can have, and has had, a distinct effect on a truly global scale, but the decision on these ratings are made by the company’s employees who are not elected by the public, and are not accountable for their decision making process. There is no appeals process against a credit-rating decision.

In August 2011, S&P filed a letter with the SEC in an attempt to water down a proposal requiring credit rating agencies to publicly disclose “significant errors” in how they calculate their ratings. The SEC proposal, issued in May 2011, would require credit raters to disclose more about their methods and strengthen internal controls to protect against conflicts of interest.

That would seem to be a good idea. It might reduce future ‘glitches’. One wonders how much credence should be given to Standard and Poor’s anyway? How much of what they publish is tailored to what Wall Street wants to hear and carefully aligned in their immediate interests?

The blame for the whole euro fiasco is not the fault of Standard and Poor’s but their interference and glitches don’t seem to be helping anyone much.

Or maybe it is……helping some I mean.

Thank you Wikipedia

 

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