Vol. III - Penn State Abington

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References Clean Air Act of 1970. 42 U.S.C. § 7403. (1990). Retrieved May 13, 2009, from http://www.law.cornell.edu/uscode/html/uscode42/usc_sec_42_00007403----000-.html Cullen, A. C., Faustman, E. M. & Kramer, C. B. (2006, March). Policy implications of genetic information on regulation under the Clean Air Act: The case of particulate matter and asthmatics. Environmental Health Perspectives, 114, 313-319 Glossary Term. (n.d.). Depleted UF6 Glossary. Argonne National Laboratory. Retrieved May 11, 2009, from http://web.ead.anl.gov/uranium/glossacro/dsp_wordpopup.cfmword_id=206 Seitz, J. S. (1995, May). MACT standards memorandum. Retrieved on May 12, 2009, from http://www.epa.gov/reg5oair/toxics/ptetime.html Vaughan, A. (2009, May). Cleaner air from reduced emissions could save millions of lives, says report. BusinessGreen.com. Retrieved May 13, 2009, from http://www.businessgreen.com/business-green/news/2242107/cleaner-air-reducedemissions THE DIALECTICS ▲ 2009 www.abington.psu.edu/dialectics 29
REFORMING THE CREDIT RATING AGENCIES: A COMPREHENSIVE SOLUTION By Yuqing Wu ∗ The George Washington University Elliott School of International Affairs When the subprime mortgage crisis broke out in 2007, few people could imagine that this crisis would evolve into a global financial tsunami. Of course, many institutions, including government agencies, are responsible for this crisis. Among them, credit rating agencies (CRAs) have aroused drastic disputes, and not for the first time. After the Enron Scandal and the IT bubble, CRAs were blamed for their failure to forecast these affairs (U.S. Securities and Exchange Commission, 2002). Criticism of CRAs has become even fiercer this time around, because they have played such a central role in the current crisis. The present financial crisis was mainly triggered by residential mortgage-backed securities (RMBs) and collateralized debt obligations (CDOs). RMBs are financial products, usually created by investment banks, that package hundreds or thousands of subprime mortgage loans into a pool. A trust purchases these pools and becomes entitled to the interest and principal payments. The trust then issues RMBs to investors in order to finance the purchase (U.S. Securities and Exchange Commission, 2008:6). In this way, investors receive their interest and principal payments through the interest and principal payments from the pool. Based on the RMBs, the CDO is created to ensure the value of the investments to RMBs, making the process even more complicated (U.S. Securities and Exchange Commission, 2008:9). Because the debt chain had been largely extended, it was difficult for investors to assess the risk of these products, even though many of them were managed by financial elites like those working at AIG. So, investors relied largely on CRA ratings of complicated products such as RMBs and CDOs. Credit rating agencies showed great optimism for these structured finance products, especially CDOs. Based on the same mortgage asset pool, 80% of CDOs could get a Triple A (AAA) rating (Zhao, 2008). Not surprisingly, CRA involvement greatly stimulated the explosion of structured finance products. Even worse was the failure of CRAs’ early detection of the deterioration of these structured finance products, without a gradual regrading. For example, New Century Financial Corporation, the second largest subprime mortgage company, issued a profit warning on 13th Feb 2007, but none of the big three CRAs (Moody’s, Standard & Poor’s, and Fitch) reacted to ∗ Yuqing Wu is currently pursuing a Master degree at the Elliott School of International Affairs, the George Washington University, with concentration in Economic Affairs and International Development. Previously, she interned as an administration assistant in the Civil Ministry of Haizhu District Government in Guangzhou City and at the Freeman Chair in China Studies at the Center for Strategic and International Studies. Ms. Wu received a B.A. in International Politics from the Public Administration School of Nanjing University (NJU). Her main interests include political economy in the Asia-Pacific region, and Sino-U.S. relations. As a native Chinese, Ms. Wu speaks Cantonese and Mandarin. THE DIALECTICS ▲ 2009 www.abington.psu.edu/dialectics 30
Page 1 and 2: EDITORIAL BOARD STUDENT EDITORS The
Page 3 and 4: A Call for Essays The Dialectics: J
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Page 7 and 8: The United States of America, 2025
Page 9 and 10: UGANDA: CONFRONTING A HUMAN RIGHTS
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Page 13 and 14: It is evident that much more needs
Page 15 and 16: LEGAL AID CLINICS IN CHINA: BRIDGIN
Page 17 and 18: ecame the country with the largest
Page 19 and 20: China’s legal aid is multiplying,
Page 21 and 22: SOCIAL CAPITAL IN URBAN PUBLIC SCHO
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Page 45 and 46: AMERICA’S LOST DECADE By Justin K
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