Barry Ritholtz has been a model for financial bloggers, turning his site The Big Picture into a heightened profile for his business and even a book deal. Impressively, he had the foresight so call his book Bailout Nation early on in the crisis.
But McGraw Hill, the book’s publisher, has decided to drop the project, even after paying him an advance and selling 22,000 pre-order volumes. What gives? It may be that Ritholtz, never one to pull punches, may have been a little too harsh on its S&P ratings unit. They publisher denies it, but that’s Ritholtz’s take.
Portfolio.com has the story:
In his original version, Ritholtz wrote that, “Far from being objective arbiters of the credit worthiness of debt instruments, the three major agencies–Standard & Poor’s, Moody’s, and Fitch Ratings–conducted a form of ‘payola.’ “
He continued: “These three rating agencies were the key enablers in the housing crisis and the subprime debacle. They were the pimps to the fixed-income fund managers’ johns. The investment banks whored out junk paper, and the ratings agencies were extremely well compensated for their role in helping to create the entire subprime fiasco. But for their imprimatur of triple-A respectability on garbage paper, it could not have danced its way onto the laps of so many drooling buyers.”
Apparently these comparisons offended McGraw Hill’s delicate sensibilities, so Ritholtz agreed to excise the inflammatory passages and beef it up. He filed a new, longer version of the section.
Yet Ritholtz says it still was a no-go. Suddenly, he says, McGraw Hill editors were indicating that his assertions couldn’t be verified. “All the conversations I had with them, they made apparent this was all about S&P’s role as sister company,” Ritholtz says. “It had nothing to do with sources and footnoting.
Apparently, he has interest from other publishers — perhaps ones without any conflicts of interest, so hopefully what he’s written hasn’t been a total waste. We’ll ping Barry and update if we learn more.
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