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Who are Moodys and why should we care?

  • 17-08-2011 8:26pm
    #1
    MagicSean
    Closed Accounts Posts: 9,897 ✭✭✭


    I don't understand why everyone puts so much stock in these credit ratings? Did Ireland not have a fantastic credit rating before the collapse. If these agencies are so important and smart should they not have foreseen a fall and adjusted our rating accordingly? All they basically do is tell us what we already know but in alphabetic form.


Comments

  • #2
    darkman2
    Banned (with Prison Access) Posts: 8,632 ✭✭✭darkman2


    Seanbeag1 wrote: »
    I don't understand why everyone puts so much stock in these credit ratings? Did Ireland not have a fantastic credit rating before the collapse.

    Yes, they made the mistake of giving us a AAA rating. The same mistake they made with the financial products being sold between banks in the US and elsewhere that caused the global crisis.


  • #3
    Debtocracy
    Registered Users, Registered Users 2 Posts: 208 ✭✭Debtocracy


    Moodys is to Wall Street as Goebbels is to the Third Reich.

    Because the entire financial system is based on confidence and reputation (because it is effectively a Ponzi scheme), these agencies can turn toilet paper into Gold (when banks are selling toxic derivatives) or crash a major economy (when banks have bet against an economy).

    The only solution is multiple publically funded credit rating agencies. The agency with the greatest predictive success gets the greatest reputation. Once the U.S. economy collapses, the big 3 ratings agencies will be history.


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