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AA (or whatever) status

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CB27
882487.  Wed Feb 01, 2012 3:28 pm Reply with quote

'yorz wrote:
Okaaaayyyy - so: Moody's one day thinks, "What shall we do today? Let's investigate, say, erm .... Denmark. Yes. Let's do that. We've nothing else to do and our investigators are getting rusty. And let's make some noise".

Not quite.

Denmark will want investors to come in and snap up their bonds as soon as they come onto the market at the best rates possible, and this will only happen if they pay the various rating agencies to report on them. There are plenty of ratings agencies out there, but it you want to be taken seriously you'll use the top three because of their reputation, therefore trust.

In the meantime, various companies will buy up these reports from agencies they trust so they can make an informed decision. For certain specialist areas they may turn to smaller agencies which are better placed, but for the biggest markets they will want to use agencies they trust most.

These agencies want to keep their reputation in order to generate future business, so will continue to monitor the markets they were paid to report on.

If Moodys want to be paid for future reports on Denmark they have to show they are keeping in touch with what's happening now even if it's coming out of their pockets, though they make plenty of profits in the long run.

 
gerontius grumpus
882532.  Wed Feb 01, 2012 7:16 pm Reply with quote

I find it more than a little alarming that the world rates countries' credit worthiness on 1.5 volt batteries.

 
'yorz
901689.  Sat Apr 14, 2012 10:24 am Reply with quote

Wow! So the UK's still AAA-rated.
Quote:
Standard & Poor's (S&P) said the UK Government had the ability to "respond rapidly" to economic challenges as it confirmed both the rating and the country's "stable" outlook. The move comes after rival agencies Fitch and Moody's put the UK on negative outlook


I'm still not sure how one company can come to a conclusion that is diametrical to another one's. Am I wrong in suspecting that perhaps bribery was involved?

 
Spud McLaren
901754.  Sat Apr 14, 2012 4:16 pm Reply with quote

'yorz wrote:
I'm still not sure how one company can come to a conclusion that is diametrical to another one's. Am I wrong in suspecting that perhaps bribery was involved?
Or possibly that nobody really knows what the fuck is going on.

Less flippantly, perhaps one agency gives different weightings from another to the various aspects of a country's performance.

 
'yorz
901758.  Sat Apr 14, 2012 4:25 pm Reply with quote

Possibly, if it were just one other agency. It were two.

 

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