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Tuesday, July 9, 2013

Because S&P Stands for "Snake-oil & Puffery"

Posted by on Tue, Jul 9, 2013 at 9:24 AM

Credit ratings agency Standard & Poor's makes an extraordinarily revealing admission in its defense against government charges that it defrauded investors:

S&P said in its request to dismiss the case that the government can’t base its fraud claims on S&P’s assertions that its ratings were independent, objective and free of conflicts of interest because U.S. courts have found that such vague and generalized statements are the kind of “puffery” that a reasonable investor wouldn’t rely on.

In other words, S&P admits that its claims to do what it says it does are little more than advertising slogans—you know, like: "More doctors smoke Camels than any other cigarette."

So years ago, when I purchased term life insurance ahead of the birth of my daughter, and evaluated the reliability of insurers based on their credit ratings, I wasn't acting reasonably, according to S&P. Good to know.

Yay for capitalism!

 

Comments (6) RSS

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fletc3her 1
Real investors trade on inside information. Everyone else is a chump.
Posted by fletc3her on July 9, 2013 at 9:38 AM · Report this
2
Ah the "everyone who's anyone knows we are shills and liars" defense. Should work perfectly.
Posted by Westside forever on July 9, 2013 at 10:15 AM · Report this
3
Speaking of insider info:

http://www.rollingstone.com/politics/blo…

When it comes to the rating agencies, one should look towards Louis Brandeis' epochal book, Other People's Money and How The Bankers Use It, to review his abysmal opinion on those useless and exceedingly unnecessary ratings agencies.

And again speaking of insider info:

http://wallstreetonparade.com/2013/07/ne…

Posted by sgt_doom on July 9, 2013 at 11:53 AM · Report this
Will in Seattle 4
See, this is why we need armed drones.
Posted by Will in Seattle http://www.facebook.com/WillSeattle on July 9, 2013 at 12:13 PM · Report this
5
Goldy, you're such an idiot. They were quoting boilerplate securities laws. Go back to your own puffery. You know, the kind you perform for McGinn while on your knees?
Posted by Noicons on July 9, 2013 at 12:18 PM · Report this
Pope Peabrain 6
The SEC was warned about the Madoff ponzi scheme for a decade but did nothing. And that, my friends, is how corrupt your government is.
Posted by Pope Peabrain on July 9, 2013 at 2:58 PM · Report this

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