Moody's lowers EU rating outlook to 'negative'
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Re: Moody's lowers EU rating outlook to 'negative'
#2What kind of organization is Moody's? Who watches them? Who made them qualified to issue ratings? Are they accountable for their ratings? Why would anyone listen what they say?
Re: Moody's lowers EU rating outlook to 'negative'
#3What kind of organization is Moody's? Who watches them? Who made them qualified to issue ratings? Are they accountable for their ratings? Why would anyone listen what they say?
http://en.wikipedia.org/wiki/Nationally_Recognized_Statistic...
What kind of organization is Moody's? - They are an NRSRO.
Who watches them? Who made them qualified to issue ratings?
"The U.S. Congress passed the Credit Rating Agency Reform Act of 2006, Pub.L. 109-291, 120 Stat. 1327, enacted September 29, 2006. This law required the SEC to establish clear guidelines for determining which credit rating agencies qualify as NRSROs.
Are they accountable for their ratings?
"In February 2009, the SEC promulgated amended regulations designed to address concerns about the integrity of the process by which NRSROs rate structured finance products,"
Why would anyone listen what they say?
"A Nationally Recognized Statistical Rating Organization (NRSRO) is a credit rating agency (CRA) that issues credit ratings that the U.S. Securities and Exchange Commission (SEC) permits other financial firms to use for certain regulatory purposes....SEC regulations also require that money market funds (mutual funds that mimic the safety and liquidity of a bank savings deposit, but without Federal Deposit Insurance Corporation insurance) comprise only securities with a very high rating from an NRSRO. Likewise, insurance regulators use credit ratings from NRSROs to ascertain the strength of the reserves held by insurance companies."
Re: Moody's lowers EU rating outlook to 'negative'
#4What kind of organization is Moody's? Who watches them? Who made them qualified to issue ratings? Are they accountable for their ratings? Why would anyone listen what they say?
Re: Moody's lowers EU rating outlook to 'negative'
#5Didn't Moody also give AAA ratings to those junk bonds that triggered the housing crisis? I think all the rating agencies did?
So why are we listening to them again?
Re: Moody's lowers EU rating outlook to 'negative'
#6Didn't Moody also give AAA ratings to those junk bonds that triggered the housing crisis? I think all the rating agencies did? So why are we listening to them again?
We need a ratings agency for rating agencies.
Re: Moody's lowers EU rating outlook to 'negative'
#7What kind of organization is Moody's? Who watches them? Who made them qualified to issue ratings? Are they accountable for their ratings? Why would anyone listen what they say?
http://en.wikipedia.org/wiki/Nationally_Recognized_Statistic... What kind of organization is Moody's? - They are an NRSRO. Who watches them? Who made them qualified to issue ratings? "The U.S. Congress passed the Credit Rating Agency Reform Act of 2006, Pub.L. 109-291, 120 Stat. 1327, enacted September 29, 2006. This law required the SEC to establish clear guidelines for determining which credit rating agencies quali…
So if I read correctly it's a US organisation, controlled by the SEC, giving european countries, UE and other structured financed products (is that novlangue for "country" ?) a note to estimate the financial credit reserve of said products.
Are there such european credit rating agencies giving notes to California or Kentucky ? We never hear about those on this side of the ocean :(
Re: Moody's lowers EU rating outlook to 'negative'
#8I think they're right. The EU as it stands today will certainly add to a deeper new recession. However: They are highly selective in their ratings. They focus on the EU and seem to 'forget' the US (and Great Britain). Both are also deeply in debt and both have no plans to even reign in their spending.
Re: Moody's lowers EU rating outlook to 'negative'
#9Didn't Moody also give AAA ratings to those junk bonds that triggered the housing crisis? I think all the rating agencies did? So why are we listening to them again?
My naive answer is: we need to stop tying our national and publicly-funded entities to ratings. Something's wrong when social security is forced to bind itself to external rating agencies that in turn make it a good idea to bet against social security (happening in France, right now).
Re: Moody's lowers EU rating outlook to 'negative'
#10Didn't Moody also give AAA ratings to those junk bonds that triggered the housing crisis? I think all the rating agencies did? So why are we listening to them again?
Yes. S&P, Moody's & Fitch seem to have the collective IQ of a kidney bean.
Then you have trillions in pension funds shifting overnight because government regulations depend on the output of these rating agencies. You could shift regulation away from these, but maybe you might have your national debt downgraded? Ratings agencies pretty much terrify governments.