Frank Raiter States Ethics Changes In Financial Industry Will Only Come With Change of Leadership

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Raiter06_cleanupNecessary

My personal opinion is, until they start cleaning house at some of these institutions that have created this mess, the same people are going to be trying to put the horses back in the barn. I don't see how, as a citizenry and a tax paying base, we can rely on Terry McGraw or Deven Sharma at S&P or McDaniels at Moody's or Joint at Fitch, to fix the issues there that they were either not interested enough in or smart enough to see coming. As it was pointed out, the rating agencies are supposed to be telling you here's what it's worth when it is issued and we're going to track it and tell you if it starts to deviate. As bad as the initial ratings were, the surveillance was nonexistent. We have firms that are being put together today by private equity groups and by venture capital groups that are going to start providing surveillance ratings on the deals that are out there now which may have more impact on instilling investor confidence in jumping back into that market than anything Moody's or S&P or Fitch can do. That's where you want the information before everybody else gets it. The rating agencies have to give their ratings a posting to the public for free, but, these new firms aren't going to go for rating agency status. What they're going to do is they're going to be private providers to investors and interested parties that will pay them, not the issuers, to give them information before something tanks. What we had in this debacle was a liquidity squeeze that happened instantaneously. All these smart players and advisors thought: hey it looks bad, but, I'll be the first out the door. The door never opened. Nobody got out the door except people that tried to move two years ago. Like the fella here from Pacifico, whatever. I mean the guys that never bought and the guys who got out in 2005. Everybody else, that thought when it started to go they would be able to jump, they never had a chance.