Moody’s upgraded the province’s financial outlook from negative to stable, saying:
The province has presented a credible plan of consistent balanced budgets with little risk that the debt burden will exceed current forecasts.
Sure. I believe that. However, journalists like Matt Taibbi would not. This is from his Rolling Stone article The Last Mystery of the Financial Crisis:
But what about the ratings agencies? Isn’t it true that almost none of the fraud that’s swallowed Wall Street in the past decade could have taken place without companies like Moody’s and Standard & Poor’s rubber-stamping it? Aren’t they guilty, too?
Man, are they ever. And a lot more than even the least generous of us suspected.
…we now know that the nation’s two top ratings companies, Moody’s and S&P, have for many years been shameless tools for the banks, willing to give just about anything a high rating in exchange for cash.
In incriminating e-mail after incriminating e-mail, executives and analysts from these companies are caught admitting their entire business model is crooked.
…The Financial Crisis Inquiry Commission published a case study in 2011 of Moody’s in particular and discovered that between 2000 and 2007, the agency gave nearly 45,000 mortgage-backed securities AAA ratings. One year Moody’s doled out AAA ratings to 30 mortgage-backed securities every day, 83 percent of which were ultimately downgraded. “This crisis could not have happened without the rating agencies,” the commission concluded.
..In the old days, ratings agencies lived on subscriptions sold to investors, meaning they were compensated – indirectly, incidentally – by the people buying the financial products.
But over time, that model morphed into the current “issuer pays” model, in which a company like Moody’s or Standard & Poor’s is paid directly by the “issuer” – i.e., the company that is actually making the financial product. …Michigan Sen. Carl Levin, one of the few lawmakers to focus on reforming the ratings agencies after the crash, put it this way: “It’s like one of the parties in court paying the judge’s salary.”
…In 2012, for instance, Moody’s profits soared 22 percent, to $1.18 billion… [In 2014, net profit was $1 billion on $3 billion revenue.)
That explains how Chrispy manages to 'Balance the Budget' while plunging us ever deeper into debt. I guess.
How come there's no plebiscite on the Deas Bridge, on Site C? Where is the news on the first $100 million Site C procurement contract for TFW accommodations etc. (Tenders closed last week). Was low bidder a Union organization like Chrispy promised?
Get the Report
The Financial Crisis Inquiry Commission published a case study in 2011 of Moody's in particular and discovered that between 2000 and 2007, the agency gave nearly 45,000 mortgage-backed securities AAA ratings. – Matt Taibbi
Here is something that has gone unreported by the lamestream media over the last 4 years and if brought to fruition could change the financial outlook of the Federal, Provincial and municipal governments very substantially. It could change everything and Canadians should be made aware of this the implications for our future.
“OTTAWA—Renowned Toronto lawyer Rocco Galati is pursuing a court case intended to do nothing less than force the Bank of Canada to reorient its activities on behalf of Canadians.
Galati, who led a successful challenge against an appointment to the Supreme Court of Canada, is representing a small Toronto group whose legal bid is attracting increasing attention from people in Canada and elsewhere who distrust global financial institutions.
“balanced budgets with little risk that the debt burden will exceed current forecasts”
The BC Govt forecasts the total Provincial debt to grow by over $2 Billion every year for the next 3 years.
How can they call that “balanced budgets”?
The total Provincial debt has doubled in the past 10 years. At what point are we unable to pay interest on debt?
Near the end of this article is the term “issuer pays” and this is a critical point. As any business manager knows, consultants will report whatever the organization writing cheques wants to hear. Sometimes, clients want an independent version of truth. Sometimes, they simply want support for what they intend to do anyway. Various public entities in BC pay for Moody's services. TransLink is one of those. They paid Moody's hundreds of thousands of dollars in the last few years.
How much does the Municipal Finance Authority pay Moody's, or BC Ferries, or BC Hydro or countless other public bodies?