Gizmodo went beyond their usual comfort zone and published this post about rating agencies and one (of the many) proposed solutions on how to rid the evil that is ratings. In my years working in the capital markets I have heard many complaints about the rating agencies, but at the end of the day, investors rely on ratings. Why? Because they value the opinion of the agencies. If they truly thought that ratings were completely broken, why do they still rely upon them? As for the conflicts issue, well, nationalizing agencies only create more problems than resolve them. And if issuers are not supposed to pay, then that only leaves the investors. But guess who often complains about the possibly investors paying for ratings? Investors.
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