One of the hallmarks of the Sub-prime precipitated 2007-2009 financial crisis were the now infamous liar loans or NINJA Loans as they were called at the time, no income, no job or assets. Moody’s and other ratings agencies were excoriated for slapping investment grade ratings on just about anything at the time, for a small fee of course. Along comes the City of Chicago to pressure Moody’s the only agency to rate the city as junk credit prior to a big bond sale. With annual tax receipts of 8.9 billion, a deficit of 5.4 billion, grossly underfunded pension and benefit programs at 31% using the latest data, never mind the appalling financial condition of the City’s schools. I could go on and on, honestly what type of credit rating do they expect?
Another fine recent example of make it up as you go along news is the story about Italy’s 3rd largest bank Monte Paschi and its 4th post crisis bailout. Originally estimated to be about 5 billion Dollars the bill has now ballooned 4-fold to 20 billion, no wonder the private investors backed out. Meaning the initial estimate wasn’t worth the paper it was printed on, yet was taken at face value. With accounting and financial analysis like that no wonder the bank is getting bailed out for a 4th time, at taxpayer expense of course.