Rating Agencies Are the Winners Here

The credit ratings agencies, Moody's, S&P, Fitch and others, helped give an assist to the financial crisis with overly rosy ratings on mortgage-backed securities. They then helped exacerbate the problem by going overly negative on financial companies whose stock prices were being pummeled by short sellers, thereby creating self-fulfilling prophetic failures - from Lehman to AIG and others. Yes, they no longer relied solely on fundamentals, but would also base their ratings on whether the stock price was high enough in the possible event that the company needed to raise additional capital, thus changing the rules of the game. (I'm sure all the shorting hedge funds are grateful.)

Now, as the WSJ says, the rating agencies are going to see a huge windfall from all the requirements for new ratings services. I smell a 90% tax coming...