Re: Octaviar MFS Premium Income Fund PIF
http://www.theaustralian.news.com.au/story/0,25197,24542645-20501,00.html
"Moody's CEO Raymond McDaniel insisted to committee members that Moody's ratings were not influenced by the bottom line."
These guys are deluded. Unbelievable. Still trying to get away with "Move along, nothing to see here". If the influence of these individuals isn't quickly severed, we're all in for a long long long haul before confidence can be restored IMO.
The ship is riddled with rot to the point that the mast has flopped over the onto deck and this git is such a prat that he thinks we're stupid enough to still buy his 'nothing wrong with this ship' drivel.
Why does it always end up having to take a revolution for these twits to be removed? Simply because they never concede.
Pink Floyd 1982:
"take all your overgrown infants away somewhere
and build them a home
a little place of their own
the fletcher memorial home for incurable tyrants and kings
and they can appear to themselves every day
on closed circuit t.v.
to make sure they're still real
it's the only connection they feel
.
.
.
did they expect us to treat them with any respect
they can polish their medals and sharpen their smiles,
and amuse themselves playing games for a while
boom boom, bang bang, lie down you're dead
safe in the permanent gaze of a cold glass eye
with their favourite toys
they'll be good girls and boys
in the fletcher memorial home for colonial
wasters of life and limb "
http://www.azlyrics.com/lyrics/pinkfloyd/thefletchermemorialhome.html
Moody's knew of risk to credit ratings quality
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Aaron Lucchetti, Judith Burns | October 24, 2008
THE chief executive of Moody's told directors last year that the push by the credit ratings agency to increase profitability posed a "risk" to the quality of the ratings process, according to an internal document released yesterday.
A five-hour hearing by the US House Oversight and Government Reform Committee included a string of emails and other documents that showed in unflattering detail how far Moody's and Standard & Poor's, which dominate the business of rating debt securities, went to accommodate bond issuers that generated giant fees for the two firms during the housing boom.
While both firms have shaken up their management ranks, tightened conflict of interest rules and made other sweeping changes in hopes of restoring their credibility, lawmakers were sceptical that those moves would be enough. "The story of the credit ratings agencies is a story of colossal failure," said Henry Waxman, chairman of the House committee.
Moody's CEO Raymond McDaniel insisted to committee members that Moody's ratings were not influenced by the bottom line. But company documents suggested that he and other Moody's executives were torn between maintaining the integrity of the ratings process and easing standards in an effort to win more business.
"Analysts and managing directors are continually 'pitched' by bankers, issuers, investors -- all with reasonable arguments -- whose views can colour credit judgment, sometimes improving it, at other times degrading it (we 'drink the kool-aid')," the CEO wrote in a presentation for directors in October last year, according to a document released by the committee. "Coupled with strong internal emphasis on market share and margin focus, this does constitute a 'risk' to ratings quality."
Another document underscored the tension and anxiety expressed by some Moody's employees as sub-prime mortgage-related securities awarded top ratings by the firm were staggered by ballooning delinquencies. Billions of dollars worth of mortgage-backed securities were sold to investors on the premise that the securities weresafe under most market conditions.
"It seems to me that we had blinders on and never questioned the information we were given," an unidentified Moody's employee wrote as part of a survey after a September 2007 town hall meeting. "Combined, these errors make us look either incompetent at credit analysis, or like we sold our soul to the devil for revenue, or a little bit of both."
A separate email forwarded by Brian Clarkson, former president of Moody's Investors Service, showed that the firm competed fiercely to outdo its rivals. Mr Clarkson's aggressive push to win business was the subject of a page-one article in The Wall Street Journal in April.
At S&P, one employee wrote in an instant-message exchange: "By the way -- that deal is ridiculous." A colleague replied: "It could be structured by cows and we would rate it."
Deven Sharma, president of S&P, said the language was "inappropriate" but showed that the firm encouraged analysts to raise concerns. The Securities and Exchange Commission examined the exchange and found no misconduct, he added.
The latest revelations are likely to fuel efforts to rein in the industry and improve its reliability. The SEC will consider new rules as soon as next month.