Financial Authors Scott Burns and Laurence J. Kotlikoff Propose Strong Steps to End...

Financial Authors Scott Burns and Laurence J. Kotlikoff Propose Strong Steps to End the Practice of ''Insider Rating''

New Federal Financial Authority Would Rate the Quality of
Securities in the Same Way the FDA Rates Food and Drugs
DALLAS--(Business Wire)--
Scott Burns, chief investment strategist for AssetBuilder and one
of America's best-read financial columnists, and Laurence J.
Kotlikoff, Boston University economics professor and author, recommend
in a column to be published Sunday that the U.S. government establish
a Federal Financial Authority to rate securities - effectively placing
warning labels on high-risk investments.

Burns and Kotlikoff lay much of the blame for the subprime
mortgage crisis at the feet of credit rating agencies such as Moody's
and Standard & Poor's, which granted asset-backed securities higher
ratings than they deserved. The authors say the agencies, whose fees
are paid by borrowers, acted in their own self-interest in a practice
they call "insider rating."

"The credit crisis has lots of fathers. But the 'See No Evil, Hear
No Evil, Speak No Evil' practice of the rating companies has the
closest-matching DNA. Like Enron's accountants, the rating agencies
knew where their bread was buttered. Now we have trillions of dollars
of securities that no one is willing to touch," Burns and Kotlikoff
write in a Universal Press Syndicate column to be published March 30
by newspapers nationwide.

"We need to put an end to insider rating. Federal Reserve Chairman
Ben Bernanke should call for the establishment of an FFA -- a Federal
Financial Authority."

The Federal Financial Authority: An FDA for Financial Securities

Among its responsibilities, the FFA would rate the quality of
financial securities similarly to how the FDA is mandated to regulate
food and drugs, Burns and Kotlikoff said.

"(The FFA) would place warning labels on subprime mortgages and
securities derived from them. The FFA would also rate the safety of
investment banks, insurance companies, hedge funds and commercial
banks...," the authors propose.

"Wall Street risk-taking has put all of us on a knife edge between
asset collapse and rampant inflation ... The first step toward a
long-term solution is to establish the Federal Financial Authority and
restore the credibility of our rating system."

About Burns and Kotlikoff

Scott Burns and Laurence J. Kotlikoff are authors of the
soon-to-be-published Spend 'Til the End: The Revolutionary Guide to
Raising Your Living Standard - Today and When You Retire (Simon &
Schuster, June 2008) and of The Coming Generational Storm: What You
Need to Know About America's Economic Future (MIT Press, 2004).

Burns is a newspaper columnist and author who has covered personal
finance and investments for nearly 40 years. Today, he is one of the
five most widely read personal finance writers in the country,
according to The Dallas Morning News. In 2006, he co-founded
AssetBuilder, a Registered Investment Advisor (RIA), where he serves
as chief investment strategist.

Kotlikoff is a professor of economics at Boston University, a
fellow of the American Academy of Arts and Sciences, and a research
associate at the National Bureau of Economic Research. He was a senior
economist for the President's Council of Economic Advisers during the
administration of President Reagan.

About AssetBuilder

AssetBuilder offers weary investors a science-based alternative to
the unnecessary costs, risks and complexity of traditional Wall Street
firms. With fees that rank among the lowest in the financial services
industry, AssetBuilder provides customers a menu of pre-constructed,
risk-managed portfolios that make choosing and implementing a personal
investment strategy simpler than ever. Co-founded by personal finance
writer Scott Burns, AssetBuilder's portfolios are an extension of
Burns' widely praised "Couch Potato" methodology. Based in Dallas,
AssetBuilder is a Registered Investment Advisor. For more information,
visit the company's Web site at www.AssetBuilder.com.

The Idea Grove
Cathy Baradell, 972-235-3439
cbaradell@ideagrove.com

Copyright Business Wire 2008