Rating weapon of economic war
The new 2015 year began for Russia from the fact that the West began to give it economic evaluations - both for the last year, for the current one, and even for the 2016-2017 years. Such assessments were made at the World Economic Forum in Davos (21-23 in January), and, to summarize, they did not look like an economic forecast, but a political sentence, reducing to one: Russia will be in a state of severe economic crisis for two or three years. At the same time, the leading rating agencies carried out a review of the estimates of the entire Russian economy and its largest companies, banks and regions.On January 9, Fitch downgraded Russia's long-term credit rating by one notch — to BBB-. The reasons for the downgrade were the sharp fall in the ruble and oil prices, as well as the increase in the key rate of the Central Bank of the Russian Federation to 17 percent. Fitch also noted that Western sanctions, including a ban on refinancing the debts of domestic companies in foreign credit institutions, have a negative impact on the Russian economy. January 13 international rating agency Fitch lowered the ratings of Russian companies 13. The revision of the rating affected including Gazprom, Lukoil and Russian Railways.
At the same time it was reported that another world rating agency, Standard & Poor's, in the near future may downgrade Russia's sovereign rating to the "junk" level. Everyone is also expecting that Moody's, a member of the “big rating three”, is about to enter the virtual game of “sinking” Russia.
These news are being discussed for the third week. At the same time, there is another piece of news related to the world rating agencies, which has not yet received the proper resonance, namely: the rating agency Standard & Poor's agreed to pay the US authorities a total of $ 80 million in "compensation" in order to close the start investigation against the agency a few years ago. History began in 2007-2008, when the financial crisis flared up in the USA. It turned out that this rating agency made a very serious contribution to the preparation of this crisis. It assigned the highest ratings to mortgage bonds, deliberately inflating the mortgage bubble. The subsequent "collapse" of this market gave impetus to the strongest financial crisis, which seized almost all sectors of the American economy, and then acquired a global scale. Today it turns out that mortgage securities were already in 2007-2008. "Junk", but S&P did not notice it.
However, the US authorities for a long time did not notice the exclusive role of the agency in creating conditions for the crisis. Why did they “wake up” so late? I note that they generally could not "wake up" if it were not for one circumstance. In 2011, clouds began to thicken over the US economy again. The overseas did not have time to recover from the financial crisis of 2007-2009, as there were all signs of the second wave of this crisis.
How should rating agencies be in this situation? Again to pretend that nothing is happening and to award the American economy the highest ratings? Or still worry about your own reputation and warn America about the storm coming on it? Standard & Poor's agency makes a Solomon decision: to downgrade America's rating from the top tier, moving it down a notch. This happened for the first time in the history of America and the rating agencies. True, none of the townsfolk noticed anything at all. And the American media began to avoid too broad coverage of this fact. Nevertheless, for the financial professionals, the S&P decision was the sensation of the year. For the "owners of money" (they are also the owners of America), the agency's decision was a daring act, for which the agency should have been subjected to a demonstrative "flogging". The financial supervision and regulation organizations and the US law enforcement agencies were alerted. All of a sudden "memory turned on", and everyone started talking about the fact that Standard & Poors shamelessly overestimated the ratings of mortgage securities. Simply put, it was engaged in manipulation in the American stock market. Those who followed the history of the S&P remember that at first they even wanted to close the agency (there were indignant statements from congressmen). Another option for "flogging" was a proposal to impose a fine in the amount of US $ 6 billion (which could well have led to the bankruptcy of the agency).
S&P executives sprinkled ashes on their heads, promising to improve. For a while, the agency did behave in an exemplary manner, which was evident in the top ratings it consistently awarded to America. Even when the budget crisis arose in the fall of 2013 and America lived for more than two weeks without budget funding (the Congress then argued about raising the "ceiling" of the public debt, which made it impossible to approve the 2013/14 budget). If something similar happened in Russia, then the entire Russian economy with its mines, railways, factories, factories and oil pipelines would immediately be declared "garbage".
The agency’s diligent behavior was also manifested in the fact that it gave extremely low and even “junk” ratings to those countries in which, from the point of view of Washington, it was bad with democracy. In fact, these were assessments of the political loyalty of these countries to Uncle Sam. For economics and finance, they have the same relation as weather forecasts to Dow Jones indices. In general, the agency demonstrated that it is perfectly able to give out white for black, and black for white. This deserved a huge discount from the amounts of penalties that he was threatened with.
Of those $ 80 million of "payoff" that the media reported the other day, $ 58 million will be paid by the S&P to the Securities and Exchange Commission (SEC). It will pay an additional $ 12 million to settle charges brought by the New York State Attorney's Office, and $ 7 million to settle charges against the Massachusetts Attorney General's Office. These are sheer trifles against the background of those fines and "compensation", which for their "pranks" on the eve and during the financial crisis of 2007-2009. paid by Wall Street banks, as well as some European banks operating in America (experts estimate that these amounts have already exceeded $ 100 billion - not bad business for American financial supervision and regulation bodies).
SEC Chief Executive Andrew Seresni commented on the S&P: “Investors expect credit rating agencies like Standard & Poor's to behave appropriately when evaluating complex securities such as CMBS (mortgage-backed securities - VC.). However, Standard & Poor's put its own financial interests ahead of investors' interests when it softened its criteria for evaluating such securities in order to increase its share in this market, and did not inform investors about these changes. The charges and the subsequent fine were the first such step for the US Securities and Exchange Commission against major rating agencies. " In these words of the official from the Securities and Exchange Commission - a warning to two other world rating agencies, a reminder that they must go exactly in line with political decisions that are made by the "owners of money" and communicated to everyone through the White House and the US Congress.
The important role of world rating agencies in preparing the global financial crisis has long been a mystery. It is enough to raise the materials of the G7 and G20 summits of the end of 2000 for the analysis of the causes and the search for a way out of the financial crisis. There often sounded open accusations against the "big three" rating agencies. Attention was drawn to the following features:
1) they are private organizations, and there is always a risk that agency owners can benefit from their rating scores;
2) methods for calculating rating estimates are not disclosed by agencies; kitchen cooking ratings are opaque;
3) no state bodies really check and control the activities of agencies;
4) there is a great dependence of agencies on those organizations that are rated, because these organizations pay for agency services;
5) all three world rating agencies are under the jurisdiction of the United States, which inevitably leads to distortions of rating assessments related to the American economy and the American financial markets;
6) rating agencies were mistaken countless times in their assessments, which casts doubt on the expediency of further using their ratings for making investment and other financial decisions;
7) the status of the agencies themselves and the ratings they give to countries and companies is such that agencies do not bear any responsibility for these ratings; they are almost impossible to bring to justice;
8) not only is the kitchen of rating ratings not transparent, but also the ownership structure of the agencies; it is difficult to understand who the ultimate owner or ultimate beneficiary of agencies as private corporations are;
9) agencies included in the “big three” monopolized the rating market (they account for from 90 to 99% of all services on the world rating market); The “Big Three” acts as a global cartel, and for some reason the antimonopoly authorities of different countries do not notice this;
10) economies and companies of those countries that refuse the services of the “big three” receive “junk ratings” from world agencies; this is a clear manifestation of blackmail and pressure on these countries; even the term “rating racket” has appeared.
At the G7 and G20 summits five or six years ago, proposals were made to restore order in the rating sphere. The range of offers was wide:
- to liquidate the Big Three agencies as being completely discredited during the crisis; if necessary, initiate investigations into the role of agencies in preparing for the financial crisis;
- put them under the control of the authorities of individual states and / or international organizations;
- to carry out demonopolization of the “rating services” industry through the creation of additional global rating agencies;
- go to the system of "double ratings" (a business entity receives ratings from two unrelated agencies);
- create in each country its own national agency, the ratings of which for national subjects of economic activity should be the main ones (and the ratings of foreign agencies - subsidiary);
- make the methodology for calculating rating estimates transparent and understandable;
- require private rating agencies to disclose the ownership structure and “ultimate beneficiaries”;
- prohibit any affiliate relations of agencies with companies, banks and other organizations operating in the financial markets.
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It has been about five years since the dust of the first wave of financial crisis settled. The second wave of the US crisis was avoided thanks to the launch of a program of “quantitative easing” (pumping the US economy with the Fed's printing press).
I am writing about the conclusions and recommendations of the five-year-old period regarding ratings of ratings and rating agencies of the Big Three in connection with the January ratings set by Russia. They cannot be taken literally - they have nothing to do with the Russian economy. “Big Three” ratings are weapon the economic war launched against Russia in March 2014 of the year is a tool of psychological management; they are conceived as self-fulfilling predictions. To neutralize the effect of these weapons on Russia, it should not be given exaggerated attention. And if we write about the action of this weapon, then with an understanding of the case. My definitions of products of world rating agencies are simple: manipulation, cheating, falsification, racketeering, sanctions, world cartel, collusion, subversive activities.
Rating agencies (or rather, their owners) do not spare anyone. One should not think that they are used to destroy only Russia. They are designed to destroy the world, including America. Conscientious economists in the United States are confident that the Americans are threatened again with the same “rating rake” that they faced in 2007-2008. planted the Big Three agencies. More recently, referring to the January ratings that Russia received, New York economist Max Frad Wolf said: “American rating agencies - Moody's, Fitch and Standard & Poor's - have absolute power in determining the creditworthiness of borrowers. And because these agencies are American, they are often accused of sharing some of the US government's biases. I think in the end we will have a greater variety of opinions in this area. And this is necessary. Perhaps only an international consortium including Russia and China can achieve this.
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