Last week, the credit rating feud between Standard & Poor's Financial Services LLC and the Chinese firm Dagong Global Credit Rating Co. Ltd - which Money Morning Contributing Editor Martin Hutchinson examined late last month - heated up.
Harold "Terry" McGraw III, chairman and chief executive of S&P said that companies like Dagong joined up with politicians and other countries to unfairly attack U.S. ratings firms.
"If you're in a populist mood, you've got to find the villain," McGraw told the Financial Times in an interview in Beijing.
McGraw referred to comments made to the Financial Times in July by Guan Jianzhong, the chairman of Dagong.
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Money Morning Mailbag: U.S. Credit-Rating Agency Fights Back to China's Attacks
Has the U.S. Lost its Grip on the Credit-Rating Business?
There's a new name in the credit-rating-agency business these days: It's Dagong Global Credit Rating Co. Ltd., and this Beijing-backed business is China's bid for a spot in the global-credit-rating oligopoly.
And Dagong's Chairman Guan Jianzhong doesn't think much of his long-established U.S. competitors.
"The Western rating agencies are politicized and highly ideological and they do not adhere to objective standards," Jianzhong told The Financial Times earlier this month.
Is he right? And does the newly passed Wall Street Reform and Consumer Protection Act correct their flaws, or does it make matters worse? It's a question that affects all investors - even those of us that don't invest in bonds, as we'll soon see.
And Dagong's Chairman Guan Jianzhong doesn't think much of his long-established U.S. competitors.
"The Western rating agencies are politicized and highly ideological and they do not adhere to objective standards," Jianzhong told The Financial Times earlier this month.
Is he right? And does the newly passed Wall Street Reform and Consumer Protection Act correct their flaws, or does it make matters worse? It's a question that affects all investors - even those of us that don't invest in bonds, as we'll soon see.
To understand how credit-raters will influence investments going forward, please read on...
The Credit Rating Firms Are Running Scared – It's About Time
When it comes to the U.S. credit crisis, we’ve all heard the numbers. The stock market decline wiped out $7 trillion in shareholder wealth. It forced the federal government to commit to $11.6 trillion in bailout programs and stimulus spending. And it’s led to the longest U.S. downturn since the Great Depression. Everyone also knows […]
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