"Europe launched a barrage of fire at credit rating agencies Wednesday after efforts to resolve the eurozone's debt crisis were plunged into new turmoil by a severe downgrade of Portugal's debt.
European Union officials and ministers reacted furiously after Moody's Investors Service downgraded Portuguese debt to junk status and warned that Lisbon may need a second bailout.
Europeans were particularly angry over the timing of the ratings cut, just as Portugal begins to implement tough austerity measures in return for a 78-billion-euro EU-IMF bailout agreed in April and as the eurozone struggles to craft a new rescue package for Greece.
(...) The downgrade caused the euro to fall and the cost of borrowing for Portugal shot up, pushing up rates for Spain and Italy as well." (EUbusiness.com - full article here)
However, just a couple of years ago:
"The three credit rating agencies were key enablers of the (US) financial meltdown. The mortgage-related securities at the heart of the crisis could not have been marketed and sold without their seal of approval. Investors relied on them, often blindly. This crisis could not have happened without the rating agencies. Their ratings helped the market soar and their downgrades through 2007 and 2008 wreaked havoc across markets and firms." (Financial Crisis Inquiry Commission, January 2011)
Moody’s and Standard & Poors were giving Lehman Brothers and other companies, triple A ratings right up to the point where they declared bankruptcy. The agencies try to absolve themselves of responsibility by claiming that their ratings represent nothing more than an 'opinion', which raises the question of why the punters should listen to them even now.
Fortunatelly the European Central Bank has decided to ignore Moody's 'opinion' now. "The global economy is still fragile and more work needs to be done in terms of regulating financial institutions other than banks", President Jean-Claude Trichet said. Better late than never!...
Countless protests by the Portuguese people, whose quality of life gets worse every day, took place on the net, such as the above Facebook page created under the motto: "Are you tired of seeing whole nations being fucked up by credit ratings agencies? Are you tired of seeing a bunch of jerks decide the fate of millions so that only a few can get even richer? Make yourself heard!"
Well, I think I've just done my part.