Irelands rating down to Baa1

ei.sdraob

Moodys this this time, that leaves S&P

tara73

http://www.businessweek.com/news/2010-12-17/ireland-s-rating-cut-five-levels-by-moody-s-to-baa1.html

newest rating from moodys'.

I really ask myself who is this moodys who is in the position to judge about the credit rating of countries in simple letter/number combinations around the world.
It's an american company/instituion who rated american banks with Aaa+ or something. surprise, surprise.

Why is europe not opening such an institution to rate countries?? rate america from our point of view? or is there? then it seems to be hidden somewhere.

there definately should be a voice against it to put things into perspective, they seem to have too much power.

tara73

http://en.wikipedia.org/wiki/Moody%27s

thoughts confirmed after 3 min research on the internet.

completely corrupt 'company', nobody should give a sh*** about them.

Fratton Fred

I think Angela Merkal had a rant about them a while ago.

Alun

Fratton Fred wrote: »

I think Angela Merkal had a rant about them a while ago.

And quite right too. Wasn't it these very same companies that were rating complete junk CDO's in the US as AAA+ not so very long ago?

ei.sdraob

Maybe we should create our own rating agency :P sure the Chinese are doing it

tara73

ei.sdraob wrote: »

:P sure the Chinese are doing it

*like*:D

ISAW

ei.sdraob wrote: »

Moodys this this time, that leaves S&P

"Baa1" looks very similar to "Baal"

Does that mean we have gone to credit hell? LOL!

Primus Rex, qui est de potestate Orientis, dicitur Baël, apparens tribus capitibus, quorum unum assimilatur bufoni alterum homini, tertium feli. Rauca loquitur voce, formator morum & insignis certator, reddit hominem invisibilem & sapientem. Huic obediunt sexagintasex legiones.

Hmmm. a toad a man and a cat! and

He speaketh with a hoarse voice, he maketh a man go invisible [and wise], he hath under his obedience and rule sixtie and six legions of divels.

The conspiracy theorists will have a field day on this one!

later12

This is very bad news for us coming as it does at a time of low trading volumes on the market, thus exacerbating the effect. Really just the last thing we (and the Eurozone itself) needs.

There is a very interesting academic paper by Arezki, Candelon, and Sy forthcoming which deals with CRAs and their spillover effect within the European Monetary Union.

If ever there were a case for Eurobonds, it is now, and over the coming months.

Hopefully, that will be realised before it is too late.

later12

Surprisingly it has not really been picked up in the Irish online media, but the FT has an article in this morning's paper on an emergency ECB - bank of England liquidity facility extended to Ireland yesterday in light of the downgrade.

More about it here and here

Quite a surprise move for anyone interested in the liquidity situation, even despite the downgrade yesterday. Particularly in terms of £ denominated currency.

EI111

RAting agencies are a joke, if they were any good at accurately rating why not start proprietary trading

later12

Yes but what would you replace them with?

Nobody likes the current format, but finding a credible solution is a serious challenge.

Atlantic Dawn

Would you lend money to this man...

danbohan

Atlantic Dawn wrote: »

Would you lend money to this man...

http://www.independent.ie/opinion/analysis/our-foolish-leaders-approved-a-deal-that-will-ruin-this-country-2465584.html

Lenihan, according to contemporaries at school, was regarded as hardly numerate. His skills were with words, not figures, and his emollient voice of comforting nonsense about our economy -- for which RTE has given generous access at any time he wanted it -- has soothed those who are stupid or who wish to hang on to power.

from todays irish independant , confirmation of what many suspected

EI111

later10 wrote: »

Yes but what would you replace them with?

Nobody likes the current format, but finding a credible solution is a serious challenge.

Why replace them with anything? let everyone make up their own minds...

later12

EI111 wrote: »

Why replace them with anything? let everyone make up their own minds...

No risk models?
You're suggesting no risk models?

The vast, vast majority of banks and investors do not have the resources to conduct independent investigations into credit worthiness or risk analysis of other institutions or countries.

If you cannot see the significance of that I would seriously question your credibility in commenting on the economic situation.

DaSilva

later10 wrote: »

No risk models?
You're suggesting no risk models?

The vast, vast majority of banks and investors do not have the resources to conduct independent investigations into credit worthiness or risk analysis of other institutions or countries.

If you cannot see the significance of that I would seriously question your credibility in commenting on the economic situation.

In truth the only problem of credibility is in these investors and the risk models. You have risk models that have been shown to be amazingly inaccurate. I can't grasp this, they have been shown to be extremely inaccurate, yet they are still regarded as a useful prediction. Then we have people who call themselves investors, yet don't have the time to carry out risk analysis themselves and yet continue to rely on these proven inaccurate models. It is seems to me, that there is still a speculative bubble.

EI111

DaSilva wrote: »

In truth the only problem of credibility is in these investors and the risk models. You have risk models that have been shown to be amazingly inaccurate. I can't grasp this, they have been shown to be extremely inaccurate, yet they are still regarded as a useful prediction. Then we have people who call themselves investors, yet don't have the time to carry out risk analysis themselves and yet continue to rely on these proven inaccurate models. It is seems to me, that there is still a speculative bubble.

Ratings bubble

later12

DaSilva wrote: »

You have risk models that have been shown to be amazingly inaccurate. I can't grasp this, they have been shown to be extremely inaccurate, yet they are still regarded as a useful prediction.

They are not regarded as dependable entirely, but yes they are actually useful. There is a new system whereby the agency actually provides an indepth commentary underlining the main reasons for the decision it takes and this has made them newly transparent and has helped, in the eyes of investors, to restore a lot of their credibility. I am not defending the agencies, I'm just pointing out the change. In the past they often just issued gradings without any explanation.

Then we have people who call themselves investors, yet don't have the time to carry out risk analysis themselves and yet continue to rely on these proven inaccurate models. It is seems to me, that there is still a speculative bubble.

Most investors or wealth fund managers do not have the time, money and resources to carry out independent credit checks on all of their purchases - it simply isn't a realistic suggestion.

Unless someone comes up with a better risk analysis model, these agencies along with some emerging Japanese counterparts are the best we have.