UK's AAA credit rating threatened by 'formidable challenges'

[Doggy Styles]

I like the last paragraph which is why I think ratings agencies are tosh:

Indeed, doesn't make pretty reading.

But to be fair, very few people understood what was going on with those funds, and those that did were making private fortunes out of them so they weren't going to lift the lid.

The trouble is, what have we got that is better than the current ratings agencies? If there is anything, it would have rumbled the sub-prime issue.

[AtW]

The trouble is, what have we got that is better than the current ratings agencies? If there is anything, it would have rumbled the sub-prime issue.

What's better is what was before - every credit organisation had to have their own risk department and make their own decisions.

A handful of rating agencies act like drunken shepards with lots of sheep ready to go where they say - this in itself creates a big problem so such businesses (Moody's) should be stopped from operating under very harsh penalties.

[darmstadt]

What's better is what was before - every credit organisation had to have their own risk department and make their own decisions.

A handful of rating agencies act like drunken shepards with lots of sheep ready to go where they say - this in itself creates a big problem so such businesses (Moody's) should be stopped from operating under very harsh penalties.

Blimey, WHS +1

[scooterscot]

A handful of rating agencies act like drunken shepards with lots of sheep ready to go where they say - this in itself creates a big problem so such businesses (Moody's) should be stopped from operating under very harsh penalties.

Almost gave some +ve there, almost. The rating agencies have already done the damage. They're instrument to a lot of what has happened and you can be guaranteed they shall exploit vulnerabilities wherever the market spotlight falls.

[AtW]

I can't remember high profile case when rating agencies did not act post factum - when problems actually happened and their downgrades only make matters worse causing massive damage in what often could have been salvageable situation.

Same goes for IMF and World Bank - usually getting involved when it's too late and it become necessary to bail out Western banks who loaned money by providing "credit" to countries that gone bust.

In theory it's free choice to use those agencies or not, problem is that they became so widely used and have so little competence and responsibility that they are only convinient to short term dirty spekulants.

<----------------------- Now do the needful

[eek]

The market lives on rumour and innuendo so rating agencies will always look like they are behind the news because the market will have priced in the expected news.

[AtW]

The market lives on rumour and innuendo so rating agencies will always look like they are behind the news because the market will have priced in the expected news.

And if rating agencies are so behind why are they still in business?

[Freamon]

And if rating agencies are so behind why are they still in business?

Because they are a cartel supported by an SEC mandate which dictates that securities have to be rated by a Nationally Recognised Statistical Rating Organisation (NRSRO), and "annoints" the current big 3 as such - in other words they are only in business because of a piece of legislation (from 1975):

Mish's Global Economic Trend Analysis: Time To Break Up The Credit Rating Cartel

[AtW]

Because they are a cartel supported by an SEC mandate which dictates that securities have to be rated by a Nationally Recognised Statistical Rating Organisation (NRSRO), and "annoints" the current big 3 as such - in other words they are only in business because of a piece of legislation (from 1975):

Mish's Global Economic Trend Analysis: Time To Break Up The Credit Rating Cartel

Exactomundo.

[Doggy Styles]

What's better is what was before - every credit organisation had to have their own risk department and make their own decisions.

A handful of rating agencies act like drunken shepards with lots of sheep ready to go where they say - this in itself creates a big problem so such businesses (Moody's) should be stopped from operating under very harsh penalties.

It's easier than that - ignore them if you don't like them. I'm sure all nations will follow your example and do the same.