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unintended consequences

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Today’s episode — the shut down of the new debt market

Ford Motor Co.’s financing arm pulled plans to issue new debt, the first casualty of a bond market thrown into turmoil by the financial overhaul signed into law Wednesday.

Market participants said the auto maker pulled a recent deal, backed by packages of auto loans, because it was unable to use credit ratings in its offering documents, a legal requirement for such sales. The company declined to comment.

The nation’s dominant ratings firms have in recent days refused to allow their ratings to be used in bond registration statements. The firms, including Moody’s Investors Service, Standard & Poor’s and Fitch Ratings, fear they will be exposed to new liability created by the Dodd-Frank law.

I am amused by the fact that the same group of people say:

“the vast web of trillions of interactions between different plant and animal species is so thick and complicated that it’s folly and arrogance for us to step in and start messing with things that we don’t understand”

and also say

“the vast web of trillions of interactions between economic actors is so simple that we philosopher kings with our law degrees and 129 IQs should absolutely step in and start messing with things that we don’t understand”.

This entry was posted on Thursday, July 29th, 2010 at 7:27 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

5 Responses to “unintended consequences”

  1. Michael Says:
    July 29th, 2010 at 12:07 pm

    I believe the Dodd Frank bill is based on the Yellow Stone Park management plan.

  2. Jenny Says:
    July 29th, 2010 at 1:29 pm

    Just 129? Jeez, they’re not even making intellectuals like they used to. You can get a score like that off a cereal box.

    And so.. one law says you have to have “X,” and another says if someone tries to provide “X,” their liability gets so high they can’t afford to offer it?

    oh boy. This is gonna be an interesting ride.

    we don’t need no water, we don’t need to water…

    :)

    nzc Reply:
    July 29th, 2010 at 2:55 pm

    There’s supposedly some evidence that life success peaks at 129 or so.

    tjic Reply:
    July 29th, 2010 at 3:05 pm

    > There’s supposedly some evidence that life success peaks at 129 or so.

    Woo-hoo! Only 90 years to go!

    …oh, wait…

  3. Bruce H. Says:
    July 29th, 2010 at 9:55 pm

    Why assume it was unintended? Cf. Steven den Beste.

    http://hotair.com/greenroom/archives/2010/07/03/the-paranoid-answer/