CAPE TOWN - The time has arrived to investigate, or “rate”, rating agencies, with specific reference to S&P Global Ratings. More so,
I feel strongly that the intent behind the so-called “ratings” deserves investigation. Is this not the world’s biggest financial scam of all times? Countries, and investors, shiver when S&P Global Ratings announces countries’ ratings.
Exchange rates react accordingly, and foreign and local investors desperately seek new investment portals. What power do rating agencies have? Did they not become the ultimate carrier of bad (or fake) news while making billions out of their own analyses? S&P Global Ratings, in particular, have never been a friend of Africa; why should they be?
Is it possible that the rating agencies are the controlled agents of a bigger universal power? Is the real intent of rating agencies not a strategical manipulation disguised as egocentric powers for their own welfare or control in a manipulated world?
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Let me take you back a bit. According to Investopedia
What is Standard & Poor’s - S&P?
Standard & Poor’s (S&P) is the world’s leading index provider and the foremost source of independent credit ratings. Standard & Poor’s has been providing financial market intelligence to decision makers for more than 150 years. S&P Global's divisions include S&P Global Ratings, S&P Global Market Intelligence, S&P Dow Jones Indices and S&P Global Platts.
Breaking down S&P.
Standard & Poor’s, which has offices in 26 countries, is well known to investors around the world for its wide variety of investable and benchmark indices, and the large number of credit ratings it issues. Standard & Poor’s is a market leader in its categories.
S&P 500 Index
The S&P 500 Index was launched in March 1957. It was the first index to be published daily, and it is a common benchmark for determining the overall health of the US stock market.
The S&P 500 Index contains 500 of the largest stocks in the US, making it a tool to gauge the overall health of large US companies. More than $7.8trillion (R107trillion) is benchmarked to the index.
Let’s look at the history of S&P:
1860
Henry Varnum Poor publishes an investor’s guide to the US railroad industry. This guide provides essential insights into the railroad industry and helps investors leverage that intelligence into smart investment decisions.
1888
James H McGraw purchases the American Journal of Railway Appliances. The publication keeps people up-to-date with the latest railway industry news and commentaries.
1897
John H Hill acquires full interest in the publication American Machinist. A trade magazine focusing on the machinery industry, American Machinist delivers information on changing conditions in machine building.
1917
McGraw and Hill merge their companies. The two publishing businesses come together to form the McGraw-Hill Publishing Company.
1923
Standard Statistics begins rating mortgage bonds. These ratings give investors essential information on the bond market, allowing them to make the right decisions.
1941
Standard Statistics and Poor’s Publishing Company merge to form Standard & Poor’s. With this merge, Standard & Poor’s becomes one of the most essential players in the field of financial information services.
1953
McGraw-Hill acquires Warren C Platt’s publishing venture. Founded in 1909, this daily market update provided vital information on the price movements and developments in the oil marketplace.
1957
The S&P 500 Stock Index is introduced. Used as a measure of the general level of stock prices, this essential index allows investors to ground their decisions in research and data.
1958
McGraw-Hill’s celebrated “Man in the Chair” ad first appears. This legendary ad set the bar for business publication advertising and reinforced the idea that nothing is more essential than getting your name out there.
1966
Standard & Poor’s is acquired by McGraw-Hill. With this acquisition, McGraw-Hill is able to bolster its offerings, bringing in the data and analytics that make Standard & Poor’s such a recognised name in the investment world.
1972
McGraw-Hill moves to 1221 Avenue of the Americas. Still known as the McGraw-Hill Building to this day, the skyscraper was home to the company until 2015.
2004
Standard & Poor’s acquires Capital IQ. The acquisition of Capital IQ expands Standard & Poor’s already extensive cache of proprietary data and broadens the company’s speciality set.
2005
Standard & Poor’s acquires Crisil. As India’s leading ratings, research and risk-advisory company, Crisil increases the reach of the company and provides an essential global piece of the puzzle.
2012
McGraw-Hill Financial launches a joint venture to create S&P Dow Jones Indices.
This venture creates one of the most essential indices in the marketplace.
The S&P Dow Jones Indices are delivering data relied on by millions of investors around the world.
2013
The McGraw-Hill Companies completes the sale of McGraw-Hill Education and is later renamed McGraw-Hill Financial. With the sale, McGraw-Hill is able to solidify its focus on the financial services industry.
2015
McGraw-Hill Financial acquires SNL Financial. This acquisition increases the number of sectors McGraw-Hill covers and adds another essential source of intelligence.
2016
McGraw-Hill Financial becomes S&P Global.
This rebranding unifies the company’s offerings under one recognisable brand to provide investors with the essential intelligence they need to make decisions with conviction.
What stories weren’t published about S&P in recent times:
Former S&P Analyst Admits To Insider Trading Charges
By Arden Dale Dow Jones Newswires
NEW YORK - A Former Standard & Poor’s credit analyst pleaded guilty on Friday to insider trading charges in connection with a scheme that prosecutors say netted him, his brother and a family friend more than $1million.
Italy court acquits S&P and managers in rating downgrades case
TRANI, Italy - An Italian court acquitted credit rating agency Standard & Poor’s and five of its former and current managers of market manipulation charges relating to past downgrades of the country’s sovereign debt, a judge said on Thursday.
US government slams S&P with $5billion fraud lawsuit.The government is seeking $5bn in its civil lawsuit against Standard & Poor‘s, accusing the ratings service of defrauding investors, in one of the most ambitious cases yet from the Justice Department over conduct tied to the financial crisis. - Reuters
Dear reader, connect your own dots.
Adri Senekal de Wet is the editor of Business Report.