Adam Hartung wrote a great column in Forbes on thinking prospectively.  So good, I took it on board to frame a conversation about R&R.
  1. Stop waxing eloquently about what you did last year or quarter. Yesterday has come and gone. Let’s talk about the future.
In 2015, R&R Consulting will focus more on selling.
  1. Tell me about important trends that are going to impact your business. Is it demographics, aging population, the ecology movement, digitization, regulatory change, organic foods, mobility, mobile payments, nanotechnology, biotechnology…?  What are the critical trends that will impact your business going forward?
Our business is essentially protected, and protectionism is a formidable adversary when you are an advocate of change. The most critical trend facing the ratings business is need to evolve from ordinal rankings to bona fide risk measures of risk and uncertainty. This is a very dense assertion that needs several steps to unpack.

We can try to change the system, or we can try to change human psychology and behavior. For my money, attempting to change the system by substituting one vision for another is a better way to change the dialogue. Ha-Joon Chang is a Cambridge economics professor, Guardian columnist and influential critic of capitalism, on a mission to change the dialogue on economics from a"god-given" puritanical framework that rewards status-quo wealth to a social system that can be improved, for the benefit of nearly everyone. His recent critique of the positive spin on austerity in The Guardian captured my attention:

Twenty years ago, rating agency analysts disagreed on whether non-AAA corporations could issue AAA-rated structured securities. Aircraft finance was the poster child of the debate. "Impossible. Too volatile," corporate analysts reasoned. Structured analysts would retort: "Not even $1 of securities can be funded at AAA?" And, if $1 can be funded at AAA levels, what about $2? $3? $1 MM? This spring, R&R got close to the emerging solar securitization market through committee work coordinated through the U.S. Department of Energy's National Renewable Energy Laboratory (NREL), which is working to promote solar energy and preparing for the imminent (2016) solar tax credit phase-out. In December 2013, NREL's Travis Lowder and Michael Mendelsohn published a white paper, The Potential of Securitization in Solar PV Finance, which argues for securitization as replacement funding. R&R discovered that rating agency bias exists against solar PV lease securitization, similar to corporate. The agencies willing to issue ratings (some are not) are capping the rating at low Investment Grade risk levels. Really? Not $1 of securities backed by energy that continuously self-generates is capable of being rated AAA?

Clive Crook of Bloomberg View applauds Ann Rutledge and Robert Litan's Brookings study, "A Real Fix for Credit Ratings": "The [rating agencies'] failure to do their appointed jobs was as spectacular as that of the banks, and at the very center of the whole mess---yet the...

Greg Gordon of McClatchy's Washington Bureau writes about the Brookings study by Ann Rutledge and Robert Litan, which calls for a single, public, numerical (ordinal, not cardinal), benchmark credit scale. Gordon quotes a recent interview with Rutledge: "'If we don’t have objective measures of credit...

David Nicklaus, business columnist at the St. Louis Post-Dispatch, quotes Rutledge on what it would mean for structured finance to replace the familiar AAA, AA, BB etc. scale with a numerical scale: "Creating a numerical score for structured debt is like putting a speed limit on...

Can securitization work in China? Securitization was invented in the 1970s to resolve a U.S. systemic financial crisis. It can work anywhere, provided that (i) the legal system supports the market’s custom and practice; and (ii) the system of risk measures reflects true security risk and value. Twenty years ago, securitization could not work in China. The law did not expressly allow asset purchases and sales. But in the last two decades, China’s central government has shown considerable will to foster securitization.

Two days ago, Business Insider published a good summary of little known facts about Alibaba. Several facts highlight how the mega trade-web dwarfs competitor e-commerce platforms in the U.S. and in China on several critical measures, including employees, registered users, web visits, sales throughput (on track...