"MF Global’s investors may not have been fully informed about the European bet, but the firm’s executives had been explaining the strategy to the ratings agencies for months, according to two people with direct knowledge of the conversations. Indeed, Moody’s Investors Service and Standard & Poor’s had applauded Mr. Corzine’s effort to overhaul the firm, a move that included ratcheting up risk.
Credit rating agencies, like Standard & Poor's and Moody's recieve their fees from the companies that they are rating. Why are some people surprised when a company fails even when having a high rating from these companies. The fox is guarding the chick coup.But the move by Finra to force the extra capital cushion appeared to only unnerve the ratings agencies when news reports about it emerged in October. A week later,Moody’s cut its rating on MF Global to a notch above junk, pointing to the European debt holdings." A Romance With Risk That Brought On a Panic, BY AZAM AHMED, BEN PROTESS AND SUSANNE CRAIG. New York Times, December 12, 2012
Why are rating agencies allowed to be bought off by the public companies that they are rating? Either this needs to change orthe agencies need to be shut down. They are doing a disservice.