US Govt Beheads S&P for Downgrading Credit Rating

                India-born S&P chief who cut US rating quits

        Experts suggested Sharma on his way out because of his bold call on US debt ‘Replacement of Sharma planned before US rate cut’

Chidanand Rajghatta TNN

                  Deven Sharma did the unthinkable. He told the world what people would utter in private and then look over their shoulders. No government in power wants truth to be exposed. US Government is just one more government speeding up the decline of its economy.

Will killing the messenger make a difference?

Ed

Washington: The Jharkhand-born Indian-American analyst who shook the world economy with an unprecedented downgrade of US credit rating earlier this month is stepping down as president of Standard & Poor’s.
Deven Sharma, who has been S&P president since August 2007, and was little known outside financial circles before his epic call on August 5, is leaving on September 12 to take up new challenges, the rating agency’s parent company McGraw-Hill said on Monday. Douglas Peterson, the current chief operating officer at Citibank, will replace Sharma.

      Most market mavens said S&P had been laying the groundwork for the change for months and it was unrelated to recent developments involving the US downgrade from AAA to AA+, a move which was slammed by the Obama administration. The downgrade resulted in turmoil in the world financial markets that is yet to subside.
In a statement, Harold McGraw III, chief executive of McGraw-Hill and current chairman of US-India Business Council, said Sharma was leaving after helping S&P split into two entities, a credit rating unit and McGraw-Hill Financial.

     DOWN & OUT
Deven Sharma was S&P president since August 2007. He was at the helm during S&P’s historic downgrade of US’s credit rating from AAA to AA+. Downgrade resulted in turmoil in the world financial markets that is yet to subside
Experts suggested Sharma on his way out because of his bold call on US debt ‘Replacement of Sharma planned before US rate cut’

      Washington: The outgoing president of S&P Deven Sharma, who was born in Dhanbad (his father B N Sharma was chairman of Bharat Coking Coal) and came to the US for higher studies, worked at Booz Allen Hamilton for 14 years before moving to McGraw-Hill in 2002, where he went on to head S&P in 2007.
Sharma holds a bachelor’s degree from the Birla Institute of Technology Mesra, a master’s degree from the University of Wisconsin and a doctoral degree in business management from Ohio State University.
While Sharma himself did not elaborate on his exit, not everyone bought into the anodyne story of his leaving for other new challenges.

      “S&P and McGraw-Hill may not regret the downgrade, but the companies clearly regret how it was done. So Sharma is on his way out, and Congressional leaders prepare to return from recess in early September to deal with America’s political and debt problem,” noted David Magee, an analyst with the International Business Times.
“The system keeps working, as it did at S&P and McGraw-Hill. And that’s why Sharma is on his way out,” he added. McGraw Hill sought to suggest that work on replacing Sharma, 55, had started even before the downgrade saga unfolded.
“Deven assisted us with the creation of these two high- growth segments and was then ready for new challenges,” Harold McGraw III said in a statement. “Accordingly, we began a process to identify a new leader for S&P.” Reports suggested that the process started in March.
Also, the SEC is scrutinizing the method S&P used to cut the US credit rating.

FRIENDS SHOCKED AT SHARMA’S EXIT
He May Be Paying The Price For Historic Downgrade Of World’s Only Superpower, Say Posts On Cyberspace
Surojit Gupta | TNN

     Deven Sharma’s decision to step down as president of ratings agency Standard & Poor’s has shocked and surprised his college mates and admirers. Sharma, who had studied in Dhanbad and Ranchi in Jharkhand, had emerged as a hero after the ratings agency’s historic decision to downgrade US debt. His move had also drawn strong criticism from economists and US policymakers.
“      It is shocking news. We still don’t know what is the real reason for his decision. There must have been some pressure on him,” said Rajendra Yadav, deputy general manager of Force Motors, who studied mechanical engineering with Sharma at Birla Institute of Technology (Mesra) in Ranchi.

     In cyberspace, Sharma’s admirers came out in support and some said his exit from S&P was a fallout of his decision to go ahead with the downgrading of US debt ratings. The move had sent shivers through global financial markets and stunned US policymakers. Global stock markets have remained volatile since the decision and the impact is expected to hurt growth across the globe.
“…you pay the price for taking on what is still the world’s only superpower,” read a post on Facebook. Surprisingly, the Facebook page which had sprung up after the historic debt downgrade does not carry any news reports or posts on Sharma’s move to step down. The page has seen more than 300 visitors.
The intensity of posts on Facebook and Twitter was much less compared to the day US was downgraded. For expatriate Indians, Sharma was a hero and a villain. But on Tuesday, cyberspace smelt a conspiracy on his ouster. “S&P President is out. Now how long before the US rating is raised back to AAA,” said a post on Twitter. “Market expected to rally tomorrow on Sharma’s outing from S&P as obedient CEO installed to upgrade US rating,” another post said.

     Sudhir Sahay, another close friend of Sharma and a businessman , said his exit from S&P was definitely linked to the debt downgrade. “His decision put the US in a difficult situation. I think he was forced to go because of that,” said Sahay, a college mate of Sharma. “Deven is a man of conviction. He was always firm in his decisions. For us, he will always remain a hero,” said Sahay.
Douglas Peterson, the current Chief Operating Officer at Citibank, will replace Sharma at S&P. “It has been a privilege to serve as the president of S&P and I am proud of what we as an organization have achieved over the past four years,” Sharma said.

           QUOTES AFTER THE RATING DOWNGRADE
Our role is to call the risks objectively, with transparency, and that’s what we try to do to fulfil our role and that’s what our job is for benefit of investors
Deven Sharma | S&P
When S&P downgraded
US long-term credit rating
from AAA to AA+, it was
doing so for some sound reasons — because of the appalling immaturity of the Republican Tea Partiers in their negotiations over the debt ceiling. In essence, this downgrade was earned not by Mr Obama & Timothy Geithner, it marks the sterling efforts of Eric Cantor and Michele Bachmann

     GUARDIAN.CO.UK
The Obama administration has made history by presiding over the first-ever downgrade in the US credit rating. President Obama has outdone all his predecessors in wrecking America’s good name. His answer to this problem: Spend even more

      THE WASHINGTON POST (OPINION)

     S&P’s decision showed stunning lack of knowledge about basic US fiscal budget math, and they had reached absolutely the wrong conclusion
Timothy Geithner |
US TREASURY SECRETARY

       There are millions of investors around the globe who trade in treasury securities. They assess our credit worthiness every minute and their collective judgment is that the US has the means and political will to make good on its obligations. The magnitude of this mistake—and the haste with which S&P changed its principal rationale for action when presented with this error—raise fundamental questions about credibility and integrity of S&P’s ratings action
John Bellows |
ACTING SECY FOR
US ECONOMIC POLICY

        Just to make it perfect, it turns out that S&P got the math wrong by $2tn, and after much discussion conceded the point — then went ahead with the downgrade. . . In short, S&P is just making stuff up — and after the mortgage debacle, they really don’t have that right
Paul Krugman | NOBEL LAUREATE

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