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Credit Ratings Agency Blackmails Christchurch City Council

Credit Ratings Agency Blackmails Christchurch City Council on Asset Sales

This story slipped by without comment from anyone in the Christmas rush. Better late than never.

On December 8th the Press reported that: “Ratings agency Standard & Poor’s has ruled out downgrading Christchurch City Council for the time being…But the agency warned that the ratings could be lowered if earthquake repair costs grow or the Council backs away from an asset sales plan” (emphasis added).

That’s more than a threat and more than a promise. It’s a very clear example of transnational corporate blackmail.

The bigger question is, though: why would anyone give a rat’s arse about what these gangsters say about anything?

Remember the Global Financial Crisis of just a few years ago, where US speculative financial capitalism brought the world’s economic system to its knees, including in New Zealand?

Who underwrote, signed off and guaranteed the financial crimes that caused the crisis?

The transnational ratings agencies, with Standard and Poor’s front and centre.

Refresh your memory and go and see “The Big Short”, which is in cinemas now. It is a most illuminating explanation of what and who caused the GFC.

There is a memorable scene where one of the leading players (marginally less unlovely than the others; there are no heroes in this true film) goes to Standard and Poor’s Wall Street office to seek an explanation of its role.

Q: “So why do you keep Triple AAA rating this shit?”

A: “You know how it works. If we don’t do it they’ll go down the road to Moody’s (another ratings agency) and they’ll do it”.

Q: “So it’s ratings for fees?”

A: “Yes”.

Come to think of it – why haven’t we seen Standard & Poor’s executives in a perp walk, paraded in handcuffs through the streets by FBI agents? Oh, I forgot – they’re “too big to fail”. That sort of thing would “undermine market confidence”.

At a bare minimum they should be made to change their name to the more accurate Standards Are Poor.

And the message to them from the people of Christchurch is: shut up, butt out and think yourself lucky that you’re not sharing the cell with Bernie Madoff.


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