Can a centrally directed economy spawn a neutral credit rating agency? Readers of NOTES have long been aware that I hold Chinese data releases in the lowest regard. My disdain is based on the inability of GOOGLE to operate freely in China and provide a forum for the “free” flow of ideas and critical thinking. There is no free and open society (Karl Popper). So I find it tragic that the markets paid attention to a downgrade of U.S. debt by the DAGONG rating agency. It is bad enough that the U.S. rating agencies are tainted by the desire for profits and are paid by the sell side of the street. But a sense that a Chinese rating agency could be independent of state influence is enough to upgrade the U.S. arbiters of credit … to well, AAA.
Posts Tagged ‘Raghuram Rajan’
Notes From Underground: Jackson Hole is where the market focus will be … and Bernanke the main act?
August 25, 2010It has been written in many domains that the speech to watch will be the paper delivered by Raghuram Rajan and Bill White. What will they say? We don’t have a clue but they are being given a great deal of pre-speech attention. Why? They have been proven prescient in their early views on the danger of asset bubbles and predicted the housing crash. Alan Greenspan belittled their work in 2005 and that is all we need to know. Even Bernanke, who was skeptical of the possibility of pricking asset bubbles, has given Professor Rajan much more respect than he previously did so will be particularly attentive to these two academics and the work they present.