Columbia Journalism Review with kudos for Bloomberg columnist Jonathan Weil’s send-up of Moody’s.
Weil’s column is here.
Basically, it centers around the unfortunate juxtaposition of Moody’s public position that it stands for “Independence. Performance. Transparency,” and its legal position as reported by Weil that
“Generalizations regarding integrity, independence and risk management amount to no more than puffery,” Moody’s said in court papers. As such, alleged “misstatements of this nature are insufficient to sustain a claim under the securities laws.”
Weil contacted Moody’s PR department which gave him a statement defending the “independence-performance-transparency” paradigm while also defending their lawyers’ dismissing that credo in court as puffery. Weil goes on:
Somehow, Moody’s statements about integrity and independence are puffery when the company is writing to a judge, yet not when its spokesman is talking to a nosy journalist.
Ryan Chittum, writing in CJR’s Audit column, brings a fine point to Weil’s arguments thus:
Moody’s defense is that the reasons the capitalist system believed in it so much that it depends entirely on it—these guys, remember, have the power of life or death over companies, and countries, when they can downgrade their debt—were just marketing hooey.
Which is true. But now they tell us?
Michael Jackson delighted people around the world with his music. He also kept a lot of people in high finance, including some private equity bosses, very busy.
