The Wall Street Journal has gotten hold of a list from Moody's called "The Bottom Rung." It names 283 companies at risk for defaulting on debt. Now that the list is public, many of those companies will find it extremely hard to raise money, and customers and suppliers may stop doing business with them due to fears the companies could disappear.
It's a shame the list is now public because it could hurt shareholders and employees at many of the corporations. The press will say it is a small price that gets paid for being in a free society.
Among the firms on the list are airline AMR (AMR) and Eastman Kodak (EK). Each company still has a reasonable chance of surviving, but will suppliers want to sell AMR airplane parts now? Will people want to buy Kodak products?
The credit agencies have made a number of costly mistakes recently, the most prominent being their incorrect ratings of mortgage-backed securities. Moody's did not have to make "The Bottom Rung List." It is difficult to see what purpose it serves, but it certainly could do a lot of damage.
Douglas A. McIntyre is an editor at 24/7 Wall St.