Morning Coffee Oct 30 2009

Credit Ratings -- Going the Way of the Walkman?

By julie steinberg

Ever since Moody's proved that "AA+" meant as little as test scores in Garrison Keillor's Lake Wobegone -- "where all the children are above average" -- the agency and its credit-rating friends have seen their street cred tumble. Not only have they been hauled before Congress, they're also on track to come under greater federal scrutiny. To heap insult on business-threatening injury, now some people don't think they're useful at all.

Some debt issuers are eschewing Moody's and S&P's ratings in favor of going naked. That is, companies are selling bonds and structuring complex securities without that previously handy-dandy credit rating attached. Suffice to say, the apocalypse hasn't occurred...yet.

Will credit agencies be obsolete by the time Dick Fuld reenters public life? Or will they find a way to prove their relevance? (WSJ)

Bills, Bills, Bills (FINS)
Two finance-related bills are making their way through Congress. One has to do with systemic risk, the other with hedge funds. Let's hope there's less snarling between Barney Frank and House Republicans this time around.

Get-Out-of-Jail-$100-Mill Card (WSJ)
Our favorite accused hedgie has appealed for lower bail and permission to travel in the continental U.S. No answer yet, but we have a pretty good feeling he isn't headed to Sri Lanka.

Dropping Out (BusinessWeek)
Staying in school isn't always cool. M.B.A. programs understand. They have a good track record when students need to take time off, for personal or professional reasons.

What Ya Gonna Do When They Come for You? (Taxgirl)
The IRS has created a new enforcement unit targeting wealthy individuals who may still be hiding offshore accounts. Does this mean the recession is over?

Another Third (Investment Dealers' Digest)
Fifth Third Bank has launched a private-equity-focused finance team. It will be led by industry veterans Brian Crabb and Josh VanManen.

White Ice (FT)
Iceland is bogged down in white-collar financial crimes investigations. Apparently, everyone and their connected brother was in on it, except for the local sheriff who's supposed to solve everything. We spy: "Law and Order: Reykjavik."

(401)empty (Investment News)
Half of workers who responded to a recent survey said they've cashed out their retirement savings when they lost jobs or moved to new employers.

Charitable Giving (Bloomberg)
Peter G. Peterson, co-founder of Blackstone, said it will take at least $1 billion in charitable donations from Goldman Sachs to assuage public outrage over bonuses. Interestingly, Peterson donated that amount to start his own foundation in 2008.

Trusting the Oracle (Bloomberg)
Much like Tom Hanks's winning the "Most Trusted Actor" title in Hollywood, Warren Buffett has garnered the "Best Financial Assessor" belt. Nearly 25% of respondents to a Bloomberg survey chose Buffett as their No. 1 numbers guy.

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