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Atlantic Yards/Pacific Park graphic: what's built/what's coming + FAQ (pinned post)

Demonstration today against Ratner's bonds targets not the underwriter but the ratings agencies (which need reform)

From a DDDB press release:
Join Develop Don’t Destroy Brooklyn in a Demonstration to Protest the extremely risky tax-exempt bonds New York State is preparing to sell for Ratner's arena. We will highlight S&P and Moody’s questionable bond ratings. Lacking in normal due diligence, the bond ratings were set just a “notch above junk.’ These “Junk Yards Bonds” create enormous risks for New York State, its taxpayers and the investment community, at a time when the State's budget gap is in crisis. While the Governor is making huge cuts in crucial sectors such as health and education, the State continues to back Atlantic Yards—a financial house of cards.
So, why exactly are the bonds "lacking in normal due diligence"? DDDB says to stay tuned.

And how do they "create enormous risks for New York State"? Well, maybe they do and maybe they don't.

The demonstration will take place at noon, not outside the office of underwriter Goldman Sachs but outside the ratings agency Standard & Poor's. Interestingly, S&P was somewhat more cautious than rival Moody's regarding the tax-exempt bonds; the latter took the projected 225 arena events a year as gospel, while S&P considered 220 events "aggressive."

Reasons for concern

Separate from the Atlantic Yards issue, there are many reasons for concerns about the rating agencies. In a long front-page 12/8/09 article headlined Debt Raters Avoid Overhaul After Crisis, the New York Times reported:
When the financial crisis began, few players on Wall Street looked more ripe for reform than the Big Three credit rating agencies.

It wasn’t just that Moody’s Investors Service, Standard & Poor’s and Fitch Ratings, played a crucial role in the epochal housing market collapse, affixing their most laudatory grades to billions of dollars worth of bonds that went bad in the subprime crisis.

It was the near universal agreement that potential conflicts were embedded in the ratings model. For years, banks and other issuers have paid rating agencies to appraise securities — a bit like a restaurant paying a critic to review its food, and only if the verdict is highly favorable.

So as Washington rewrites the rules of Wall Street, how is the overhaul of the Big Three coming? It isn’t, finance experts say.

...But nothing in the laws tackles the critic-for-hire problem or threatens the 85 percent market share that Moody’s, S.& P. and Fitch now enjoy.

...Without question, the credit rating system is one of the capitalism’s strangest hybrids: profit-making companies that perform what is essentially a regulatory role. The companies serve the public, which expect them to stamp their imprimatur on safe securities and safe securities alone. But they also serve their shareholders, who profit whenever that imprimatur shows up on a security, safe or not.
Need for independence

The article states:
To make matters more complicated, rating agencies are deeply entrenched in millions of transactions. Statutes and rules require that mutual fund and money managers of almost every stripe buy only those bonds that have been given high grades by a Nationally Recognized Statistical Rating Organization, as the agencies are officially known.

But even if there is no foolproof way to reform the rating agencies, the measures that Congress is now backing are strikingly weak, a number of critics say. There is no talk, for instance, about creating a fee-financed, independent credit rating agency, one modeled along the lines of the Public Company Accounting Oversight Board, which was established to oversee auditors after the Enron debacle — an idea floated by Christopher J. Dodd, the Senate Banking Committee chairman as recently as August.