Wednesday, February 03, 2010

Another dose of cynicism (in the sense of distrusting or disparaging the motives of others, not necessarily showing contempt for accepted standards of honesty or morality) from Robin Hanson, this time on rating agencies vs. subordinated debt:
Apparently well-connected managers already know they prefer estimates by officials who respond to social pressure, over hard-to-manipulate market estimates, even if the later are more accurate. Of course less well-connected managers should prefer the opposite, but who wants to signal their bad connections by endorsing independent markets?

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