Brookline’s Aaa Team.
By Jim Conley • Aug 19th, 2007 • Email This Post to a Friend •
Print This Post
• Email this author
This site has frequently taken the position that the Town of Brookline’s Aaa bond rating is not the “seal of approval” that town administrators and the Selectmen make it out as. The Aaa bond rating is proof positive, say town hall hacks, to Brookline’s status as “Massachusetts’ best run town.”
My view on a credit rating, or any Wall Street rating for that matter, is informed by the dot-com bust of several years back…when even the most nonsensical business would be the beneficiary of a “strong buy” rating by Wall Street analysts.
And then there is today’s New York Times story on the credit crisis brought on by sub-prime lenders, along with these chilling excerpts:
“…bond rating agencies willing to hope for the best in the housing market and provide sterling credit appraisals to debt issuers…”
-and-
“The spotlight will focus first on rating agencies like [the town hall team's beloved] Moody’s and Standard & Poor’s, because the mortgage-backed bonds that plunged in value in recent weeks were highly rated by these agencies until they downgraded billions worth of them in July.”
When the people who bury themselves in debt point to the favor of those who encourage debt as proof of their acumen, we’re screwed. Especially when there’s ample evidence that a credit rating can be as meaningless as “the buy before midnight” call to action in a Ronco television commercial.
Jim Conley is publisher of On Brookline.
Email this author | All posts by Jim Conley
Saxophonist James Moody’s “Moody’s Mood for Love” has become a jazz standard that survives to this day. But Moody’s bond ratings of late have been more “Hip Hop” than jazzy.
Consider that Brookline with a population of 55,000+ is run by elected part-timers. While the Town has full time managers, who has confidence that these elected part-timers have the ability or will take the time from their day jobs to properly manage the managers? There is no accountability as a practical matter. Moody’s “Aaa” rating for the Town needs the addition of an “h” followed by an exclamation point to express how many of us feel.