Rating agencies

Discussion in 'General Trading Discussion' started by Gelsemium, May 7, 2014.

  1. Gelsemium

    Gelsemium Senior Investor

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    A couple of years ago most countries took a huge blow on their ratings and their taxes for their debt went sky high. Now the economies are better, but the ratings are still negative. Do you think rating agencies do a good job?
     
  2. JR Ewing

    JR Ewing Super Moderator Staff Member

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    I think US rating agencies in general do a good job. But it seems as though you have to be wary of them becoming politicized these days. Just look at the way the one agency got threatened and harassed by the admin for downgrading US treasuries a while back.
     
  3. Strykstar

    Strykstar Well-Known Member

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    Well if a particular economy is recovering I think it's just a matter of time until the ratings increase.
    You can't forget that these ratings agencies are also out to make money, just like everyone else.
    So if they know that an economy is on the rise, they wait a bit before raising the rating so they and their friends have a bit more time to invest....
     
  4. Gelsemium

    Gelsemium Senior Investor

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    Yes, it's crazy the power that those rating agencies have. The can rate a country how they want and that will mean a huge advance or setback for them. Who regulates these agencies after all?
     
  5. JR Ewing

    JR Ewing Super Moderator Staff Member

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    There are rules that people in the biz have to follow that are designed to keep them from profiting from their positions of power or advanced inside knowledge at everyone else's expense. Congressmen were able to insider trade legally until recently though.
     
  6. Gelsemium

    Gelsemium Senior Investor

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    Yeah, but those rules usually are made by those who can benefit from that inside information, so things are not working properly, but no big surprise really. I just don't get how those rating agencies have so much power...
     
  7. Lasonax

    Lasonax Active Member

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    I usually don't trust agencies such as those very much, I think for myself. It's a bit sad that the agencies themselves can affect the stocks just by their ratings, but that's a different question.
     
  8. Strykstar

    Strykstar Well-Known Member

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    I have no doubt that those regulations don't work at all like Gelsemium says.
    Sure they sometimes catch someone and make a big show of sending them to jail, but that's just 1 person in 10000 doing it.
     
  9. Peninha

    Peninha Senior Investor

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    I don't know really, sometimes it's not just a matter of thinking by ourselves, it's the power those agencies have to influence interest rates and the whole world. Power generates more power...
     
  10. mark973

    mark973 Well-Known Member

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    I think they do a good job for the most part. However, they have a lot of power and can influence the economy.
     

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