Deregulation Obfuscation

Many economists and reporters are claiming the financial meltdown was a free market failure following deregulation. In particular they cite the independence of the "private" ratings services for misleading their investors.

Now the problem here is like education, one must be "accredited" to be able to do the work. To offer securities, they must be vetted by one of the government accredited ratings agencies, such as Moody's. But like the fed, how can you owe your faculties to the government, but not be subject to political influence and corruption.

The Wall Street journal is reporting on page C1 of its Sept 23 edition that Moody's analyst Eric Kolchinsky has blown the whistle on specific examples.

Kolchinsky wrote in a memo "Moody's issued an opinion which was known to be wrong."

Well, that seems to be a nice way of saying Moody's behaved fraudulently. How can an opinion be wrong? At any rate, the meltdown was a highly regulated affair, and the ratiings agencies are hardly "free market."

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