"The market just came to the realization that values in credit assessments were far from the mark. Now, we're rapidly adjusting to
that reality--and there's a lot more pain coming down the pipe."Sean Egan, CEO, Egan-Jones Ratings
While Standard & Poor's, Moody's Investors Services, and Fitch Ratings drew heavy criticism after overrating mortgage securities, Egan-Jones Ratings, a small credit ratings agency
based in Los Angeles, was lauded for its foresight. Sean Egan was an early critic of bonds backed by sub-prime mortgages.
"The core problem behind the current crisis was a false belief in inflated credit ratings," says Egan. According to the CEO, his competitors are still placing too much faith in a
number of companies. Egan's main targets: the media, airline, auto and insurance industries, amongst others. For example, while the S&P gives MBIA, a major bond insurer, an A
rating, Egan dropped a C-bomb on the firm--and projects a D rating in the future.
NEXT: The regulator