Moody’s and Iceland.

Today I read an article in a Dutch newspaper, whereby the rating agency Moody’s predicts and claims death, destruction and the annihilation of Iceland and its population, if they do not pay up protection money claimed by states as the Netherlands and Great Britain.

 

First you must ask, what is a rating agency?  It is a company – basically an accounting firm without clients - that is hired by other companies to value them, it is not a independent organization for the good of men, they live by offering their ratings for a lot of money.  If their rating does not comply with the perception the issuer had he will not use this rating and find another rating agency that fits its needs.

 

You must ask yourself three questions :

 

• Were was  Moody’s when Icesave went to the Netherlands and Great Britain, answer nowhere, because nobody hired them.  

 

• The other question is who gave the residential mortgage backed securities (RMBS) en Collateralized debt obligations’ the basis of the financial crisis their triple AAA credit status as being a total secure investment and  

 

•  The last question, where was Moody’s when Enron (in 2001), Arthur Anderson, Worldcom and Lehman Brothers (2008) and Goldman-Sachs - yes Goldman-Sachs is according by their own Darwinian business rules a bankrupt but bail-out company - and GM collapsed.

 

All these questions can be answered with one answer: You do not bite the hand that feeds you.

 

So what is this new report by Moody’s regarding Iceland?: First of all they state that Iceland has a debt; wrong answer, somebody (Netherlands and Great-Britain) claims that Iceland owes them money, so Moody’s already starts on the wrong foot and false assumptions, therefore a worthless report. Moody’s can only do the number crunching of data from a company and give a statement regarding its financial en economic situation at that moment, they cannot predict, if they could, why did they not see Enron, Arthur Anderson, WorldCom, Lehman Brothers and all the others coming?

 

Any correlation between on one hand a claimed but not approved or accepted debt and on the other hand the impact to the total economy of Iceland, the political landscape national- and international for generations to come is of such contempt of the intelligence of the Icelandic people and simultaneously a statement of the incompetence of Moody’s, that Moody’s just made a rating of Moody’s itself: ‘junk status’.

 

So follow the trail back to the entity, which commissioned the Moody’s report and you will find its true meaning and purpose.

 

Micha Fuks

Ósæmileg framganga matsfyrirtækisins Moody's 

Moody's: Nei í þjóðaratkvæði sendir ríkið í ruslflokk