It's a WSJ editorial on rating agencies. Here is the most amazing bit:
Since 1975, the Securities and Exchange Commission has limited competition in the market for credit ratings by anointing only certain firms as "Nationally Recognized Statistical Rating Organizations" (NRSROs). A 2006 law has begun to lead to faster approvals of new entrants, but this follows decades of protection for the incumbent firms.
The SEC went an entire decade, beginning in 1992, without allowing a single new competitor into the market. Thomson reports that in 2007 Moody's rated 95% of corporate bonds, while S&P rated 93%. (Corporate bonds usually carry at least two ratings, so offerings often feature ratings from both S&P and Moody's.) Fitch, at 37%, is the only other firm with significant market share.
More here.
Bottomline:
The key to better ratings is for Congress to make the rating agencies compete in a market where no one is required to hire them.
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