Saturday, July 25, 2009

RealPoint Discloses CMBS Methodology

In a move that is simply too coincidental to be a coincidence, the ratings firm RealPoint on Thursday announced that it will make public the underlying methodology pertaining to three separate CMBS ratings actions. The decision comes on the heels of recent criticism towards Standard and Poor's for that firm's erratic ratings activity in the CMBS realm. Investors are - wisely we believe - questioning the credibility of S&P in light of the fact that CMBS downgrades harm the Government's ability to effectively conduct a number of rescue schemes, including the TALF. S&P's labeling of some securities as AAA - despite having downgraded those securities just a week earlier - cast doubt over whether the ratings firm is operating independently of the United States Government (and it's every wish).

RealPoint must see the current situation as an opportunity to supplant the (three) major ratings firm in the eyes of investors. The pdf below was released as part of the latest RealPoint initiative, and would appear to view commercial securities (at least this specific issue) from a more critical (realistic) perspective than it's more established (by the Government) competitors. We welcome actions such as RealPoint's because, as every good capitalist is aware, it's all about competition.

RealPoint CMBS methodology disclosure Sphere: Related Content

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