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Municipalities to be rated like corporations



March 13, 2008 – Comments (1)

Naked Capitalism had a post about this Barney Frank guy who was threatening to intervene if the rating agencies didn't quit their discriminatory rating of the municipalities.

The way the ratings work right now a BBB bond is probably a better credit risk than an AA corporation.

Well, Naked Capitalism is reporting that the rating agencies are responding already.  Apparently Moody's will rate municipal debt on the same scale as corporations.  The lower rating system for the municipalities has increased demand for insurance.  Investors are not as likely to require insurance for a AAA municipality. 

So, the profitable side of the municipal issurers is so dead, first directly competing with Warren Buffet, and now, lowering demand because of being force to correct basically a corrupt rating system. 

1 Comments – Post Your Own

#1) On March 13, 2008 at 12:49 AM, dwot (29.66) wrote:

F--- bail outs are expensive... this one is a piece on the cost to tax payers of the f--king banking system's constant excesses and negligence.  Seriously, haven't all these costs come out of bank capital?  So many people have done well over the years with banking stocks -- yet taxpayers have been on the hook so often?  What garbage.

Here's another one, why the rich are getting poorer...  I am not sure, but I am feeling a lot more confident about Canada's financial health, both now and longer term as I've learned more about the markets and ultimately Canada will be a wealthier nation because we probably have more natural resources per person in our country than almost all other countries. 

Anyway, Canada is one of the countries it recommends putting some some to... 

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