Thursday, July 12, 2007


Paul Krugman, Princeton Economics professor, and NYT columnist, hit the nail on the head today, in criticizing the rating agencies for the impending Collateralized Debt Obligation (CDO) disaster. He writes, "the bond-rating agencies, have gone along with the premise, telling investors that the synthetic assets created by CDOs are equivalent to high-quality corporate bonds".

The rating agencies, like the Big 4 CPA firms are part of the problem. As long as they are immune from malpractice lawsuits, they will say anything without fear of retribution. Congress should repeal the 1995 Litigation Reform Act and let the chips fall where they may.

By the way, former Treasury Secretary John Snow is trying to raise money for a Chrysler leveraged buyout. It's nice to see our former "public servants" doing so well.

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