It appears the market is beginning to speak out about the debt ceiling debate. The momentum to the downside is increasing, which takes the market closer to downside technical levels. If the politicians don’t get this train under control soon, we could be looking into the chasm soon enough …
It took the embarrassment of the Madoff scandal to drag the SEC into the 21st century when it comes to tracking tips and complaints.
Anyone who has been reading this column for a while knows that I have railed against the corruption in the trading world. Specifically, I wondered aloud why the SEC could not do a better job of tracking corruption when they received tips about corruption. Recently, I applauded those high profile cases that were springing up from SEC investigations. I became optimistic that this organization set up to protect the system against corruption would improve its track record, especially in light of its dismal failure investigating the Bernie Madoff Ponzi rip off.
Today, I read an article that increases my optimism that this agency will live up to its charter. You can find the article at Yahoo News in the Business section. I encourage you to read it if you have the same concerns I have about corruption in the world of trading. The premise of the article is that the SEC is finally using advanced computer technology to do its business.
The TCR Database is the SEC’s most significant response to its well-documented fumbling of early tips about Madoff’s $65 billion fraud. The SEC’s new Office of Market Intelligence, which last summer also forged a first-of-its kind partnership with the Federal Bureau of Investigation, is using the database as a key tool.
I have also railed against the corruption in the ratings agencies, specifically in light of the role they played in the financial collapse. Finally, Congress is doing something about that as well.
Executives from U.S. credit rating agencies are expected to face sharp congressional scrutiny on Wednesday for their companies’ roles in the financial crisis and the U.S. debt ceiling debate. Such companies have been blamed for helping to fuel the financial crisis by assigning top ratings to securities that were backed by subprime mortgages, which then plummeted in value as the housing market collapsed.
Although the testimony that is going on today is, well, mostly blather, it is, nevertheless, blather that has to happen so the light of sanitation shines on the dark side of these agencies. The idea of ratings agencies is a good one, but I hope Congress shines a bright spotlight on the fact these agencies play the role of “objective” analyst for the same folks who pay their bills. It just doesn’t meet the smell test for me …
Trade in the day – Invest in your life …
