Jason Zweig (WSJ), gives a wonderful account of largely forgotten economist (at least by non-economists) Melchior Palyi’s 1930s era warnings on the unreliability of bond ratings. Jason also notes that Palyi was no fan of easy money policies (like perhaps an extra $600 billion in “stimulus”?) characterizing them as ” a sort of Santa Claus to the economic system” that can lead to “runaway inflation.”
If anyone finds an old Payli paper on winning craps strategies, please forward it to me.
Jason’s article also includes a link to the September 2010 paper by economists David Levy of George Mason University and Sandra Peart of the University of Richmondthat discuss Palyi’s argument against relying on Moody’s and a link to the page on JSTOR’s site where you can find Payli’s paper “Open-Market Policy and Totalitarian Control.” Perhaps the ideas aged better than the title.