Srdjan Popovic

Never Listen to the Rating Agencies

I believe that in the current crisis the role of the rating agencies went beyond those of neutral observers... as was the case many times before. For example, if you remember the Peso crisis in the early 90s you will recall that the rating agencies also gave great ratings to bonds depending on financial instruments that behind ten layers of smoke had only Mexican bonds. Take some junk bonds, repackage them a few times and hide that they even exist, and get A ratings. Only this time it was sub-prime. Are rating agencies incompetent or corrupt? Without proof it remains an open question.

A Remedy for Short Selling Manipulation

There is a theory put forward over 100 years ago that bear raids by themselves can't force the price down as the insiders and others with knowledge about the company would be more than happy to buy at lower prices and by doing so push them back up. Those who get in trouble are the technical speculators caught between two trends, but so be it. The buyers might decide to wait for a better entry, but they won't wait forever... if the company is any good, of course. However, when you have a lousy company or weak economic conditions, it is all too easy to blame it all on short-sellers.