Goodbye for now to my contrary friend.

After a winning pre-opening short sale and cover, followed by a losing attempt to re-engage the trade later this morning, I’ve closed out (for now) my longstanding short in Moody’s (MCO).

My thesis and moral opinion is that there's no place for the issuer-pays model that’s enriched the rating agencies, largely at investors’ expense. And there’s a fair amount of concern about legal liability.

But I get the sense that the machine defending these institutions is about to engage fully.

Some pretty powerful lawyers are on the case, and don’t forget, the investment-management industry desperately wants the rating agencies to keep doing things pretty much the way they’ve been.

Why?

Because they provide cover for portfolio managers who would rather not stick their necks out.

It helps that Representative Paul Kanjorski -- who's ignored plenty of warnings from independent-minded investment managers over the years -- is arguing that the rating agencies weren't perpetuating fraud even as former employees have testified that the agencies willfully ignored the facts to produce acceptably high ratings.

There’s still a battalion of analysts who like the stock. Earnings will doubtless come in strong and the current buoyant market conditions will give rise to optimistic company forecasts, likely to drive out some of the shorts that are sticking around.

More to the point, day-to-day pricing in the name tends to be driven by the optimism (or is it pessimism) of short sellers who seem to think, from the activity of the last few days, that the trade has played out.

Plus, there’s the specter of Warren Buffett, who cut his position but might, at any time, be uniquely positioned to spin the company’s story positively to willing Congressmen once they have done the requisite grandstanding against Moody’s.

Having said all that, I wouldn’t conceive of going long the stock, and I wouldn’t be surprised to see it meaningfully lower a year from now. But I’ve fought the good fight enough, at least for now.