Ratings Agencies are they Corrupt?

irishtrader

The rating agencies ought to be regarded as a stand up joke. Why? Well, think for a moment. Now that Sovereigns and banks are actively tackling balance sheets the rating agencies are downgrading them. However, during the time Sovereigns and banks let caution fly to the wind and disregarded solid banking and balance sheet values the rating agencies gave them AAA status.

During the time, before the onset of the financial crisis, when finance houses were repackaging virtual junk mortgages under new financial engineered securitization and selling them from the US to the rest of the world etc etc the rating agencies gave these junk packages AAA status.

Can you really trust the rating agencies? I say they should be regarded as contrary indicators. They are totally discredited and worse as monitors of good financial and economic standing they have failed.

They have failed worse than the banks as they are suppose to monitor !!!

They ought to be investigated and held to account for the financial crisis as much as any other institution.
What is your opinion?

Idu

Gibberish. They rate the chances of an institution defaulting on it's obligations. So for the banks during the boom that was minimal hence the AAA rating. How there's a real chance hence the downgrades. Simple really

Skopzz

Yes, they are corrupt. The 3 main credit rating agencies (Fitch, S&P & Moody's) are an anglo-saxon dominated spectre of bi-partisan raters. In laymans terms, they basically make bigger profits when they downgrade a country like Ireland.

The Eurozone sovereign debt crisis last spring was an example of their market speculative mania. That in turn helped fester a bond vigilante attack against the government bonds of Portugal, Spain, Italy and Ireland at that time. Bonds yields soared.

The USA and UK (bigger debt laden nations than Ireland) ironically retain AAA rating and surprise surprise; these 3 agencies refuse to downgrade themselves. On a more positive note, there is talk about the creation of a European credit rating agency (which will one day bypass these biased agencies).

Idu

What a load of nonsense. You clearly haven't a clue what you're talking about.

In answer to one of your ludicrous observations and to refer back to my original point is that the US and UK have their own currency and so can print their way out of debt trouble. The chance of default is pretty much zero, hence the AAA rating. How do you not understand this? The PIIGS do not have such a luxury. Plus the fact that Ireland and Greece had to call in the EU/IMF sort of justifies the rating, although I could see the point of it being a self fulfilling prophecy. But corrupt, nope

ranger4

Skopzz wrote: »

Yes, they are corrupt. The 3 main credit rating agencies (Fitch, S&P & Moody's) are an anglo-saxon dominated spectre of bi-partisan raters. In laymans terms, they basically make bigger profits when they downgrade a country like Ireland.

The Eurozone sovereign debt crisis last spring was an example of their market speculative mania. That in turn helped fester a bond vigilante attack against the government bonds of Portugal, Spain, Italy and Ireland at that time. Bonds yields soared.

The USA and UK (bigger debt laden nations than Ireland) ironically retain AAA rating and surprise surprise; these 3 agencies refuse to downgrade themselves. On a more positive note, there is talk about the creation of a European credit rating agency (which will one day bypass these biased agencies).

I agree, The US based rating agencies who i believe have contributed to present fin crises with their previous worthless AAA rated assets have also been deliberatly damaging the euro zone financial markets to appease their Large corporate paymasters who have billions riding on euro collapse, IDU you want to wake up and smell the coffee if you believe the ratings agencies have no blood on their hands for helping in part to cause present global meltdown.

woodseb

Skopzz wrote: »

The USA and UK (bigger debt laden nations than Ireland) ironically retain AAA rating and surprise surprise; these 3 agencies refuse to downgrade themselves. On a more positive note, there is talk about the creation of a European credit rating agency (which will one day bypass these biased agencies).

so the US/UK rating agencies are biased and won't downgrade themselves, so we create a European agency to provide unbiased ratings of European nations.....which won't be biased at all:pac:

woodseb

ranger4 wrote: »

IDU you want to wake up and smell the coffee if you believe the ratings agencies have no blood on their hands for helping in part to cause present global meltdown.

i don't think he actually said that - you'd have to look long and hard to find someone who disagrees with that statement

Idu

ranger4 wrote: »

I agree, The US based rating agencies who i believe have contributed to present fin crises with their previous worthless AAA rated assets have also been deliberatly damaging the euro zone financial markets to appease their Large corporate paymasters who have billions riding on euro collapse, IDU you want to wake up and smell the coffee if you believe the ratings agencies have no blood on their hands for helping in part to cause present global meltdown.

You still think of Davy as a reputable institution so your opinion on this is less than worthless to me. And as stated I never said they didn't have a part to play.

ranger4

Idu wrote: »

You still think of Davy as a reputable institution so your opinion on this is less than worthless to me. And as stated I never said they didn't have a part to play.

LOL, when have i ever said any ratings agency was reputable, getting your facts all wrong again dear boy.

digme

irishtrader wrote: »

The rating agencies ought to be regarded as a stand up joke. Why? Well, think for a moment. Now that Sovereigns and banks are actively tackling balance sheets the rating agencies are downgrading them. However, during the time Sovereigns and banks let caution fly to the wind and disregarded solid banking and balance sheet values the rating agencies gave them AAA status.

During the time, before the onset of the financial crisis, when finance houses were repackaging virtual junk mortgages under new financial engineered securitization and selling them from the US to the rest of the world etc etc the rating agencies gave these junk packages AAA status.

Can you really trust the rating agencies? I say they should be regarded as contrary indicators. They are totally discredited and worse as monitors of good financial and economic standing they have failed.

They have failed worse than the banks as they are suppose to monitor !!!

They ought to be investigated and held to account for the financial crisis as much as any other institution.
What is your opinion?

I'd rate them up there with a countries military.

ixus

Enough nonsense. Locked.