SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Value Investing
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Paul Senior who wrote (28645)10/21/2007 10:52:51 PM
From: Spekulatius  Read Replies (1) of 78740
 
MCO
Yes, maybe they will be so sued. It's not relevant to their stocks though (imo).

it will be relevant if the damages that MCO is going to be sued are significant to their market cap. Since the losses from CDO and such stuff are going to be staggering ( a few 100B$, I think), it is conceivable that the lawsuits would sink MCO and the like.

They agencies will argue - imo successfully - that they gave good faith estimates; they have had nothing to gain by intentionally issuing wrong calls; they are raters which means they offer opinions; they are not people who are promisors or guarantors; and they made reasonable conclusions with the info they had at the time to make the opinions they made. <i/>

This case is different then Enron. With Enron MCO had not much to fear because they had no or very little inside information. But is is notable that Arthur Anderson, which helped Enron to fabricate their numbers went under because of their liability involved with Enron. I believe the situation that the rating agencies are finding themselves in, is much more like Arthur Anderson in Enrons case. MCO ratings were developed with the issues of those now infamous papers. They were paid with the issuers and a significant part of their revenue stream depended on this business. They developed the rules of the game and they did the rating. Without them, there probably would not be a market for those CDO papers. So I think they will get sued for substantial amounts of money, right fully so in my opinion.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News