Little-Guy Ratings Agency: We Were Right
At the Hill hearing underway right now before Rep. Henry Waxman's (D-Calif.) oversight committee, one of the little-guy credit rating agencies is taking full advantage of his moment in the spotlight to a) criticize his big competitors and b) advertise his business.
Sean Egan, managing director of Egan-Jones Ratings, a tiny competitor to Moody's, Standard & Poor's and Fitch, just testified that he would not give AAA ratings (the highest) to Fannie Mae and Freddie Mac when the Big Three ratings agencies still were.
"How is it that the major analysts have been so consistently wrong?" Egan rhetorically asked, while pointing out that the Big Three employees outnumber his by 400-1.
Egan said the Big Three have veered off track while his firm still fights for the investors. A Hill hearing might not be the most-watched TV event, but it's still cheaper than buying a Super Bowl ad.
"Moody's, S&P and Fitch have gravitated toward the much more lucrative business of expediting the issuance of securities," he said.
-- Frank Ahrens
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