Tuesday, April 07, 2009

Blumenthal challenges the credit ratings agencies

With regard to the January 2008 fund balance policy discussion, anyone happen to remember the lovefest between the Council majority and the ratings agencies? The Council majority sure seemed to have a lot of faith in the ratings agencies and their desire for a big fat rainy day fund. I first revisited the value of the ratings agencies back in December 2008.

Fast forward to April 2009 and AG Dick Blumenthal is talking about the Council's vaunted ratings agencies (AP):

Connecticut Attorney General Richard Blumenthal is questioning why $400 million is going to the big three credit agencies that he says helped created the economic meltdown.

Blumenthal said Monday he is investigating why a $1 trillion government bailout program steers money to Moody's, Fitch and Standard & Poor's.

Oh no! Government money is getting steered to certain companies? Say it ain't so, Joe!

The story continues:

The attorney general says the three agencies overrated bonds now regarded as toxic assets and say they will be rating new bonds issued to restart lending and solve the economic crisis they helped create.

I'm so glad the Council majority had such faith in those wonderful ratings agencies. The Council majority continues to prove President Obama's slogan "judgment matters."

Tim White

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