Standard & Poor’s Overrated Ratings Settlement; Spirited Numbers for Whiskey and Bourbon; Who Will Radio in on RadioShack?

Poor ratings system…

Image courtesy of suphakit73/

Image courtesy of suphakit73/

It’s shaping up to be an expensive week for Standard and Poor’s, the ratings company owned by McGraw Hill Financial Inc. After two years of legal wrangling, where the Department of Justice accused the S&P of defrauding investors, S&P agreed to pay for $1.5 billion in a settlement. According to the lawsuit, S&P made sub-prime mortgages sound way better than they actually were, generously over-rating them during the height of that hard-to-forget financial crisis of 2008. One of the juicy little highlights from the lawsuit, as taken from an excerpt from an instant-messaging exchange between two of its analysts, goes a little something like this: “It could be structured by cows and we would rate it.” So what were they trying to say about our friends in the bovine community? Hmm. While S&P gets to avoid admitting actual wrongdoing, as per the terms of the settlement, it will be shelling out $687.5 million to the DOJ and another $687.5 million to 19 states and the District of Columbia. S&P said the DOJ was only coming down on them because it downgraded the US sovereign debt from AAA all the way down to AA+, but the DOJ says NOT! In a separate lawsuit, S&P  reached a settlement with pension fund, Calpers (California Public Employees Retirement System), also a victim of S&P’s too-generous sub-prime mortgage ratings system.

I’ll drink to that…

Image courtesy of artur84/

Image courtesy of artur84/

It’s been a very good year for bourbon and whiskey as exports of these spirited spirits topped the $1 billion mark. Even here in the US, sales for Kentucky bourbon and Tennessee whiskey grew, with revenue for both rising 9.6% to $2.7 billion and 19.4 million cases of the stuff being scooped up. 19.4 million cases? Who are you people drinking all this? But it’s the premium selections that are really hitting it big with drinkers…er, consumers, as revenue in that category is up over 19%. All this while beer seems to be experiencing a decline on the whole by 4% in the last five years, with Budweiser losing 28% for that same time frame, despite those super Superbowl ads. Craft beer, however, tells a different story as that tasty category is experiencing an uptick. Some analysts are even thinking all these increasing numbers come courtesy of millennials, who seem to prefer high-quality spirit versus the stuff their parents enjoy. By the way, it should be duly  – and might I add, fondly – noted, that Kentucky produces 95% of the world’s bourbon supply. Go Kentucky!

Shacked out…

Image courtesy of cool design/

Image courtesy of cool design/

Rumors are swirling as to who will emerge and scoop up RadioShack as bankruptcy looms near for the company that was just never able to compete with the behemoth that is e-commerce. The New York Stock Exchange had suspended trading of the 94 year old company on Monday, with shares tanking down to $0.14 a share in after hours trading. So will it be Sprint who decides to take up some of RadioShack’s retail leases? The company has 4,300 stores in the US, alone. Or will Amazon add the chain to its arsenal and increase its brick-and-mortar presence in the world? Word on the street is that Jeff Bezos might do just that as a way to showcase some of the gazillions of products that Amazon has to offer, for the right price, of course.

One response to “Standard & Poor’s Overrated Ratings Settlement; Spirited Numbers for Whiskey and Bourbon; Who Will Radio in on RadioShack?

  1. Radio Shack HQ is here in Fort Worth with us – but the best part was, just last year Mr. T and I found a Radio Shack right next to us, next to stores that we visit all of the time, so we walked in and asked when they moved in… apparently they had been there for years and years! I was like “are you sure?” They are in the corner store, and apparently they only had the name on the building on the side that faces the road… the road out of town… but they admitted that when they added a sign that faced the shopping center, their business picked up.

    Ya think!?!

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