As Alex Pollock Alex Pollock of the American Enterprise Institute points out in a new study, "End the Government-Sponsored Cartel in Credit Ratings," the government "both mandates demand for rating agency services and severely restricts supply".
Both Standard & Poor's (S&P), owned by McGraw-Hill, and Moody's have reported steep declines in first-quarter earnings, as demand for rating such instruments has tumbled along with new issues.
Instead, he dabbled with a broader organisation, the National Association of Ratepayers Action Groupss, whose equivocal aims combined demands for rate relief and, more controversially, a "strong leader".
"The tide that has changed is that there is greater demand and need for rating comparability today given the changes in the market," said Gail Sussman, Moody's executive in charge of public finance ratings.
As the reform of the RMB exchange rate mechanism continues, foreign exchange risk faced by Chinese enterprises is increasing and the demand for exchange rate hedging instruments along with it.
As the chart shows floating rate issuance is a long way from its 2006 peak, but as more LBOs refinance, CLO demand for floating rate bonds will rise.
In addition, the demand for data rate and high-quality user experience is continuously increasing.
Washington Mutual (25, WM), the nation's largest thrift, has clocked good earnings over time and is likely to report a gain approaching 16% this year as demand for adjustable-rate mortgages increases with rising rates.
So why the demand for higher rates?
Treasury Prices Rise By Bloomberg News Treasury prices rose yesterday as a decline in stocks bolstered demand for fixed-rate government securities.
