No one will know...how it works
Friday, June 25, 2010 at 11:28AM "It's a great moment. I'm proud to have been here," said a teary-eyed Sen. Christopher J. Dodd (D-Conn.), who as chairman of the Senate Banking Committee led the effort in the Senate. "No one will know until this is actually in place how it works. But we believe we've done something that has been needed for a long time. It took a crisis to bring us to the point where we could actually get this job done." Washington Post, June 25, 2010
This pronouncement is stunning in many respects. First, it is true. ‘No one will know…how it works’, and Senator Dodd was not even under oath. It is also true that it took a crisis, and one of Congress’ own doing, to bring Congress to a point where it felt it had to act. With the US on its way to losing its Aaa/AAA ratings, the economy on the rocks, record deficits and the like, Congress needed to revise the mechanic by which it monetizes its ability to regulate.
Set aside for a moment the abject imbecility that ‘no one will know…how it works’. Consider that vague law and regulation encourage rent seeking behavior from deep pocketed market participants: take a member of Congress to lunch today and it better be good. Political favor, not efficiency or customer satisfaction become the rule (GE comes to mind). Rent seeking behavior prejudices the success of smaller, more innovative market players. Worse, vague law and regulation are the means by which government diminishes our freedoms.
We again affirm that absent reform of the national, residential real estate mortgage markets any presentation or claim of financial reform is simply manifest political fraud of the highest order.
regulation
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Moody's supports the many measures in the financial regulatory reform bill that enhance the transparency and accountability of the credit ratings process and is committed to implementing them in the most effective way possible," Moody's said in an e-mail statement to Reuters.
"At the same time, we remain concerned that certain provisions of the bill could have unintended consequences or trigger disruptions in the credit market," the statement said.
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