Banking, finance, and taxes
Moody's (MCO) Egg-Heads Say Ambac (ABK) And MBIA (MBI) Are Junk
Published:
Moody’s (MCO) primary ratings unit gives Ambac (ABK) and MBIA (MBI) "Aaa" ratings. Those ratings were in trouble, but when the two companies raised capital, they kept their Good Housekeeping seals.
It turns out that Moody’s has a small unit that looks at the credit markets much differently than most of the company’s other analysts do. The little skunk-works is called Moody’s Analytics.
According to Bloomberg, "The official ratings of these companies say the insurers are in great shape; the alternative ratings say they’re in dire danger of defaulting on their debts." That second set of ratings come from within the halls of Moody’s itself.
It will be fascinating to see whether the old line analysts at the ratings agency or the Analystics group. wins this debate. The "official"l Moody’s position could be very, very wrong.
Douglas A. McIntyre
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.