The Democrats' political exercise in tightening the ropes on the financial industry is proving to have unintended real-world consequences.  The three major credit-rating agencies, S&P, Moody's and Fitch, are refusing to attach their ratings to new bond issues, for fear of new and unknown liability created by the Dodd-Frank financial reform bill. The Wall Street Journal reports on the havoc created in the bond market: The new law will make ratings firms liable for the quality of their ratings decisions, effective immediately. The companies say that, until they get a better understanding of their legal exposure, they are refusing to let bond issuers use their ratings. That is important because some bonds, notably those that are made up of consumer loans, are required by law to include ratings in their official documentation. That means new bond sales in the $1.4 trillion market for mortgages, autos, student loans and credit cards could effectively shut down. There...(Read Full Post)