s. and p. itself and moody's and fitch because the u.s. and france are in such bad shape due to all the so-called aaa rated collateralized debt obligations and other credit derivatives that s. and p. allowed to be rated aaa and these country's banks bought these toxic debt so that's an interesting part of the history isn't it during the period leading up to the financial crisis the selling of collateralized debt obligations c.d.o. zas they're known and other flora and fauna of the derivatives fear spawned by the which are self life masters. fish and moody's and s. and p. gave these cancer nations these abominations their aaa rating and it created this huge ponzi scheme now they've pulled the rug out from underneath. another story related to this financial chaos going on at the moment bank of new york mellon charges depositors america's biggest bank has been forced to start charging customers who have deposits of more than fifty million dollars as more investors take cover from the my. turmoil so they're saying that they're basically trying

fish and moody's and s. and p. gave these cancer nations these abominations their aaa rating and it created this huge ponzi scheme now they've pulled the rug out from underneath them well max another story related to this financial chaos going on at the moment bank of new york mellon charges depositors' america's biggest custodial bank has been forced to start charging customers who have deposits of more than fifty million dollars as more investors take cover from the. turmoil so they're saying that they're basically trying to force people out of cash and into somewhere else because they're receiving so many people coming in flooding the banking system with all this cash and this is something we've spoken to james turk about where he envisioned reverse capital control that instead of capital controls being on money being taken out of the u.s. it would be against money being brought into the u.s. in order to avoid the hyperinflation of all those dollars that are overseas yeah another great point trying to stop that

s. and p. and moody's you know i give s. and p. credit for stating the obvious that the world's largest debtor has a aaa credit rating it makes absolutely no sense. on the other hand china's credit is rated far far below that of the united states is or the world's largest creditor nation so. these read the to see is just like this a prime mortgage issue they have to be more realistic in it and start reading things correctly oh i don't pick china's using the agency's dollar going as a policy tool i think they're just. reading known what the you know and based on the numbers because if we are we have a guest often jim records who's coming out with a book currency wars and the very near future the title says that all of the countries are fighting a war using currency and we know that relations with. china and the u.s. are beginning to get a bit strange that china is up upping their military presence there upping their stealth jet fighter technology so currency wars would seem perfectly in keeping with the idea that they that bond rati

the banks they're supposed to be rating so there's a natural conflict of interest there it's fraud moody's s. and p. and fitch commit fraud they commit fraud f r a d that no one's going to call up and say hey max don't call us fraudulent peddlers of fraud or securities because they have to prove that they were selling fraudulent securities and i have yet to got that call yet to come on the show it's total fraud the fact that they've got a license to operate in america shows that america has become one big cluster well the important thing banks is this wasn't two thousand and seven it's openly reported in bloomberg news barack obama eric schneiderman all the attorney generals who are demanding that eric schneiderman make a deal with these banks to give them immunity from all of this fraud they're saying that they want to move on a twenty billion dollars which is not even half of what they collected in bonuses christmas bonuses last year and now all across america you're seeing austerity measures imposed and a lot of the population demanding it but it's these pension funds that they're underfu

s aaa rating. for the time being, at least, it says the debt agreement will confirm the aaa rating on the united states debt. we'll now wait for moody's and s&p to chime in with theirs. one other thing to note, you want to know why the dow is down? one of the reasons, that super committee. it promises between now and november to be the fighting ground as the president just said for all those issues that didn't get solved in this particular debate. >> so at least the good news, one of those three agencies now announcing as you just reported, they are not going to downgrade. s&p, standard and poor's, moody's, we will have to wait awhile to see what they do. a lot of people assume at some point they might but it's by no means a done deal. >> reporter: absolutely not. they will probably hold on their hands, this is a very good deal for the starting process of cutting the u.s. deficit, but they are going to look three, six, five years out and say what is the deficit likely to be and how is the u.s. trying to deal with it. i expect moody's and s&p will wait before they would make any major decisions. certainly not after a massive arrangemen

s. and p. moody's and fitch let's assess test one the mortgage crisis of two thousand and eight these are the same agencies that rated the toxic sub prime debt aaa so i mean how do we take them with any level of credibility after that. well let's see if they get any from tess to the too big to fail banks and insurers during the financial crisis they missed many of the big bankruptcies they gave high investment grade. ratings to lehman to bear stearns right to the very end gee they gave a aaa rating too to almost the day collapse good grades for firms that collapsed or were bailed out because of bad debt in fact the financial crisis inquiry commission said the three credit ratings agencies were key enablers of the financial meltdown and this brings us to test three ethics ratings agencies are paid by the investment firms they grade and moody's and s. and p. are publicly traded which means they may be more driven to increase profits for shareholders raising this debate right now you have the companies th

at the moment, both fitch and moody's and s&p have said they will wait and see. see whether this really does create, say, 3 trillion or 4 trillion worth of cuts over the long term. it fit does do that, then things look more optimistic. however, if they determine that this deal does not really make serious -- i use the word serious -- cuts into the u.s. debt load, then they will downgrade. this is not about what happens today or next week or next month. this is about the long-term ability of the united states to deal with its debt problems. and when they decide to downgrade or if they decide or perhaps they decide to downgrade, they will be saying that not enough has been done. at the moment, i would put a pound to a penny, as we say, that they are going to sit on their hands for a bit longer. >> dow industrials right now, richard, i know you can't see the numbers, down 31 just after the opening bell. so what is your take? >> reporter: i take this as being that exactly what you and i talked about yesterday. the rally yesterday was an inch thick and a mile wide. a

and by the way, that's that list of countries that are rated aaa by moody's and s&p. you can see the united states no longer on that list. what do you think, ken? >> i think what happened over the summer was pretty frightening. and it's our constitution -- we look like the italian parliament. that's how countries get into trouble, because they can't govern themselves properly. we look riskier from that. but the data's gotten worse. we're slipping back into slower growth. people were counting on fast growth to just sort of get our way out of this. and then, well, your political system doesn't work perfectly, it doesn't matter. it is riskier because difficult decisions need to be made. we're not going to get out of this quickly. the stock market's fallen dramatically. the economy slowed. there are some tough decisions, and it could affect inflation, for example, which is something s&p takes into account. if there's going to be high inflation, that makes your bonds worth less, that counts, too. so it does feel riskier. no doubt about that. >> all right. we have two very

it was was curious, it's not going to-- they were shooting back at s & p, the government is-- >> for now they've left fitch and moody's off. >> i don't believe that. i believe they're involved. >> neil: s & p is the one that was reported. >> noi what was reported. i believe they're in it together and i will say this though, if were you going to tell me does anybody deserve to be investigated out of the 2008 financial crisis, it's s & p, moody's and fitch. >> neil: and that would put congress. >> listen, i've been very, i've always said it was a government inspired crisis, but these guys put triple-a ratings on some of the worst. >> neil: no doubt, no doubt. >> they might have caused the financial crisis. >> neil: and s & p, and believe me i'm not saying it saint. i find the curious gangup, and senate banking panel looking into it and, i don't see that with fitch and moody's, maybe it will come, but i don't see it. >> it is pay back and it's headlines, but frankly you need to have your head examined if you buy anything based on what standard & poor's says. going back to enron and worldcom. the mortgage securities. they

s&p. not necessarily moody's or fitch? >> i think people thought if there was no change it was matter time. i think it was going to happen, just a question of when. >> neil: all right. so this notion that money finds another home, that all these people who have been supporting our debt, chinese, the japanese, the canadians, the germans, that they have nowhere else to go, is that true? >> they have gold to go to. you will see -- we will see how gold trades. u.s. is still the best house in maybe not such a great neighborhood. western economies people still want to own treasuries. >> neil: that's better than my view we stink they stink more. that's far more harvardish. no wonder you are a harvard professor. former vice chair at goldman sachs; he has been pretty uncanny on this. different reaction, one for the treasury markets where they are fairly san begin and okay one for the stock market where they are barney five. come back to d.c. now. do it right this time. republican jack kingston demanding his leagues do just that a c

if fitch and moody's had ginned s&p to say, hey this -- had joined s&p to say, hey this turkey stinks? >> probably not. i think the markets had already anticipated this. >> neil: they believe s&p not necessarily moody's or fitch? i think people thought if there was no change it was a matter of time. i think this was going to happen, just a question of when. >> neil: this notion that money finds another home. all these people who have been supporting our debt, they have nowhere else to go, is that true? >> they have gold to go to. we will see how gold trades. as they say, u.s. is still the best house in maybe not such a great neighborhood. it is all relative. in economies i think people still want to own treasuries. >> neil: better than my view, we stink, they stink, far more harvardish. robert kaplan, thanks very much. he's been pretty uncanny on this a different reaction one for the treasury markets where they are fairly sanguine and okay one for the stock market where they are barney fife. do it right this time, republican jack kingston demanding his colleagues do that. congressman