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No-one loses
May. 14th, 2008 09:02 amThe Federal Reserve has come up with a left-field idea to solve the current credit crisis. Inspired by examination proedures introduced in US and UK schools in the 1970s, the Fed has told the rating agencies that applying any rating of less than triple A to a company "smacks too much of failure" and condemns the recipients of such "second-class assessments" to a life of borrowing at high interest rates, and the inevtiable descent into drugs and a gun culture "on the wrong side of the tracks".
"We saw one company downgraded to triple C and within six months its employees were out of work and its CEO was reduced to selling pre-owned cars in Missouri", said Caryl Albertoni, Fed Reserve marketing spokesperson. "Clearly if the company had been given a triple A credit rating, none of these unfortunate events would have transpired".
Henceforth, rating agencies are being told to award all companies a triple A rating unless they can provide solid evidence why they should not. In addition, the rating agencies will be paid a subsidy by the US government in proportion to the number of companies that they rate triple A. "We like to reward success", said Ms Albertoni, who previously worked for Bollix & Bollix Advertising Agency in Austin, Texas, winning the 2005 award for "most innovative campaign" when she headed up the "Anyone Can Borrow A Million" campaign from Lubbock-based InterGlobal Bank (now in Chapter 11).
S&P immediately welcomed the proposal.
"We've long felt uncomfortable condemning younger companies to a sub-standard life by failing to be able to give them triple A ratings, even though the companies have assured us that their credit was good", said Billy Bunthorpe, 23, S&P head of emerging company strategies. "It will be like a fresh of breath air here to be able to give start-ups a triple A rating straightaway, rather than have to wait a few years".
Other experts in the field who welcomed the Fed decision included Conrad Black, Jeffrey Skilling and the estate of Ken Lay. Even the investment community seemed unfazed. Sol Bernstein of Kohlberg Kravis Roberts said that "A rating agency's rating ain't been worth shit for years now. Might as well go the whole damned hog".
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"We saw one company downgraded to triple C and within six months its employees were out of work and its CEO was reduced to selling pre-owned cars in Missouri", said Caryl Albertoni, Fed Reserve marketing spokesperson. "Clearly if the company had been given a triple A credit rating, none of these unfortunate events would have transpired".
Henceforth, rating agencies are being told to award all companies a triple A rating unless they can provide solid evidence why they should not. In addition, the rating agencies will be paid a subsidy by the US government in proportion to the number of companies that they rate triple A. "We like to reward success", said Ms Albertoni, who previously worked for Bollix & Bollix Advertising Agency in Austin, Texas, winning the 2005 award for "most innovative campaign" when she headed up the "Anyone Can Borrow A Million" campaign from Lubbock-based InterGlobal Bank (now in Chapter 11).
S&P immediately welcomed the proposal.
"We've long felt uncomfortable condemning younger companies to a sub-standard life by failing to be able to give them triple A ratings, even though the companies have assured us that their credit was good", said Billy Bunthorpe, 23, S&P head of emerging company strategies. "It will be like a fresh of breath air here to be able to give start-ups a triple A rating straightaway, rather than have to wait a few years".
Other experts in the field who welcomed the Fed decision included Conrad Black, Jeffrey Skilling and the estate of Ken Lay. Even the investment community seemed unfazed. Sol Bernstein of Kohlberg Kravis Roberts said that "A rating agency's rating ain't been worth shit for years now. Might as well go the whole damned hog".
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