The Ratings Debate

Here is the “skin–in-the-game” clause for originators and ratings agencies. This helps to prevent the next crisis.  We still need clarification and common sense review of the real value of existing multi-bligor securities. The existing bonds that have been downgraded will probably never be upgraded. These assets will be a drag ...

The Insurance Industry regulators made their choice yesterday. To give insurance companies accurate values on the downgraded mortgage bonds they own, the regulators made the common sense decision to abandon a ratings-based system and use an expert third party to measure the true economic value of holdings. By using Pimco, ...

Here is the link to the Fitch Ratings replay, “Low Ratings, High Recoveries.” Though many formerly investment grade U.S. RMBS have been downgraded to distressed levels, ultimately principal and interest recoveries can be substantial, according to Fitch Ratings. Yesterday's webcast, the replay of which is now available, includes a discussion of the ...

Watch  this two-and-a-half-minute interview with Blackrock’s Larry Fink. He discusses how single obligor ratings are OK, and that multiple obligor measurements need to be fixed. He also points out that the NAIC is seeking its own solution to the multiple obligor problem. Thanks for the backup, Larry! Viewpoints: Fink on Real Estate Sector - ...