Topic: Rating Agencies

An NPR story regarding a "Cheesepocalypse" or Velveeta shortage is deconstructed as a blatant example of native advertising. The hosts point out that the source of the story was Kraft's own Tumblr page, launched during "Advertiser Week." They estimate the value of such a four-minute "earned media" segment on national public radio to be between $50,000 and $150,000.

A theory is presented suggesting that US-based ratings agencies like Moody's and Standard & Poor's are intentionally downgrading European nations to sabotage the Euro. The recent three-notch downgrade of Italy is cited as evidence. The hosts discuss how these financial maneuvers benefit American interests at the expense of European stability.

Historical financial scandals, such as the collapse of the prefab housing company Sterling Homex, highlight long-standing issues with brokerage firms like Merrill Lynch betting against their own recommendations. Current lack of SEC oversight is criticized regarding the failure of ratings agencies like Moody's during the subprime crisis. The segment contrasts the prosecution of Martha Stewart and Mark Cuban with the lack of accountability for major institutional failures.

The hosts criticize the role of rating agencies and Goldman Sachs in the financial crisis, calling the system a "scam." Dvorak shares a story about a college prank where students signed a petition to "end women's suffrage" without knowing what the word meant, illustrating a broader point about public apathy and lack of education.

The global financial crisis is attributed in large part to the failure of rating agencies that granted "AAA" status to subprime mortgage securities. This systemic failure has led to a breakdown in the lending system, which has transitioned from personal relationships to automated, often offshore, computer-driven processes. Observers suggest that the current economic turmoil is the result of widespread "shenanigans" and a lack of transparency on Wall Street.