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A comment on The Worst Ideas of the Decade - Sarbanes-Oxley. Parent comment

Re:The Worst Ideas of the Decade - Sarbanes-Oxley by byrneseyeview on Monday December 21, 2009 @01:06PM (#1008252)
One simple proxy: implied volatility of put options. Since put option buyers only make money when the stock falls--dramatically, and quickly--they are the most effective way to bet that someone is cooking the books.
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Re:The Worst Ideas of the Decade - Sarbanes-Oxley by joubert on Monday December 21, 2009 @02:44PM (#1008447)
How would they know the books are being cooked?
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Re:The Worst Ideas of the Decade - Sarbanes-Oxley by byrneseyeview on Monday December 21, 2009 @05:35PM (#1008747)
How would a rating agency? The options traders have money on the line; the rating agency is betting its reputation--which means it can exploit mispricings in the reputational marketplace by doing a bad job and hiring good PR people and lobbyists. This is the purest, most cynical way to explain ratings agencies in general.
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