Rating agencies' move reveals their Achilles' heel

Columnist Dennis K. Berman explains how a recent power play by the major credit rating agencies revealed their weakness. After the Dodd-Frank act passed, the agencies refused to let issuers use their credit ratings, which are legal requirements in the world of asset-backed securities. The move brought the market to a halt. "Yet what looks like a demonstration of political and market power is anything but," Berman writes. "In fact, it speaks to the raters' own weakness that their greatest leverage comes after an inconvenient, if unintended, short-circuiting of the bond markets." The Wall Street Journal

America's AAA Rating Is Cut in Land of Bubbles

“While Moody’s and S&P ignore the wreckage that America’s finances have become, Beijing-based Dagong Global Credit Rating Co. is uncorrupted by the system that enables developed-world debt addicts to appear fiscally clean. It rates U.S. debt AA, two levels below the top grade.
Dagong is right to turn the world of A- and Baa1 on its head even though rating China higher than the U.S. is hubristic at best. Anyone who thinks China deserves a top rating or is devoid of debt landmines isn’t looking very hard.”
William Pesek

Chinese credit rating agency rates the 50 biggest economies

Dagong Global Credit Rating released sovereign-debt ratings for 50 countries that account for 90% of the world's economy, in a move to break the credit rating monopoly of Moody's Investors Service, Standard & Poor's and Fitch Ratings. The Chinese firm gave the U.S. an AA rating, lower than the top AAA rating it assigned to Norway, Denmark, Luxembourg, Switzerland, Singapore, Australia and New Zealand. Xinhuanet.com