More lucrative than Microsoft?

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	More lucrative than Microsoft?

jcfalkenberg

12-25-2007 7:37 PM

289 views

tags:

credit, rating agencies, moody's, s&p

jcfalkenberg says:

Credit Rating agencies are even more profitable than Microsoft, thanks to a SEC-sanctioned de facto duopoly. More, they ain't even responsible for their mistakes

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/5054bd9f-7dc3-4980-a9fd-17c26a4eac13/BF68F3B7-7F6A-4BC7-9F83-15202C20E965/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://online.barrons.com/article/SB119809206941640049.html?mod=djemWR" href="http://online.barrons.com/article/SB119809206941640049.html?mod=djemWR" style="font-size: 11px;">online.barrons.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://online.barrons.com/article/SB119809206941640049.html?mod=djemWR">"nationally recognized statistical rating organization(s).</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://online.barrons.com/article/SB119809206941640049.html?mod=djemWR"> the two top dogs preside over what the Justice Department terms a partner monopoly</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://online.barrons.com/article/SB119809206941640049.html?mod=djemWR">This duopoly has proven inordinately profitable, which perhaps explains why Warren Buffett is Moody's top shareholder, with a nearly 19% stake. S&P's results are buried in the financials of its publisher parent, <SPAN class="chartToolTip" id="ataglance_stock_DWC_label"><A href="http://online.barrons.com/public/quotes/main.html?type=djn&symbol=MHP" class="verdana rolloverQuote">McGraw Hill</A></SPAN> (MHP), but pure-play <SPAN class="chartToolTip" id="ataglance_stock_DWC_label"><A href="http://online.barrons.com/public/quotes/main.html?type=djn&symbol=MCO" class="verdana rolloverQuote">Moody</A></SPAN>'s (MCO) earns some of the fattest margins in the S&P 500, with pretax income last year of $1.1 billion on a mere $2 billion in revenue. Even monopolists like Microsoft would kill for Moody's operating margins, typically 50% or more.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://online.barrons.com/article/SB119809206941640049.html?mod=djemWR">the agencies have long escaped any legal liability for issuing errant ratings by asserting that their actions constitute free speech protected by the First Amendment. In essence, they portray their ratings as nothing more than editorial opinion.</blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/BF68F3B7-7F6A-4BC7-9F83-15202C20E965/blog/" title="blog or email this clip"><img src="http://content7.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

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