More on credit rating agencies

Looks like Moody's, Standard & Poor's and Fitch are in for some more bad press. These hugely profitable companies--and make no mistake they are out to make a buck--suffer in part from a lack of public knowledge about what exactly they do. The process by which they assign ratings is something of a black box, and right now, it is easy to bash them for their cozy relationships with issuers, It's a bit like regulatory bodies and industries. At some point, the regulator is co-opted. Few would be surprised if a lot of agency employees were angling to get hired by the big issuers, where the money is better. Next month's house hearing should be interesting. Reform is in the air, especially in Europe. For all the controversy, you have to wonder if breaking the cartel will really help. It might just give the issuers more options to find someone they can "work with." 

For more bad press:
- this lengthy Portfolio.com article is a good example