Ratings Agencies (Moody's, Fitch, Standard & Poors)

[TalkinPeace2]

Is it time the real world told them to go sling their hook?

They rated sub prime CDO's as AAA because the people selling them paid for lunch.
They are now downgrading all and sundry (admittedly to the levels they should have been at anyway)
but maybe its time more people said -

"you are just trend following analytical parasites and we will not base our business decisions on your press releases"

YUP
Greece is a mess, PIIG are a mess, but will basing interest rates and investment decisions on the opinions of a bunch of over remunerated non tax payers actually cure the problem?

or should investors get back into their (pre Madoff) habit of doing their own investment due diligence?

[Littleredant]

Have to say that I wondered why we're (I'm) being encouraged to knock Greece et al but not be worried about our (my) savings in Nationwide & Skipton (speaking personally).

[Matsikula]

Don't worry, Moodys have just downgraded the UK banks too!

Actually, if you are worried, you should check you have no more than £80,000 with any one banking group, so that you are properly covered by the compensation scheme. Are Nationwide and Skipton are both independent?

[Littleredant]

Yup, Skipton and Nationwide are not linked and I know all about the Govt-backed compensation scheme. What I meant was that I am bemused how Greek, French and Italian downgrading was represented as bad and today the message was 'don't panic' when UK institutions downgraded.

[said]

WhoTF are these people though?

[Littleredant]

Said, They are the same people who told us all it was a good idea to invest in credit derivatives etc a few years' ago. Govt's etc really need to stand up and say 'boo' to them and the rest of us need to get a grip! Anyway, off to view Autumwatch and enjoy my weekend!

[said]

Exactly! Jumped-up, self-interested and self-important irrelevancies.

[AugustMoon]

Seems like a stupid thing to do, downgrade the banks' credit ratings, has the immediate effect of wiping yet more billions off the stock market and devaluing the economy. But I guess Moody's know what they're doing, might reign in the confidence of bankers to trade such vast amounts of debt with these institutions and once shares have recovered and confidence restored there will be a less flippant attitude towards astronomical salaries and bonuses! Or not...?

[TalkinPeace2]

Matsikula
I watch deposit safety for professional reasons
NOBODY has lost their money in an onshore registere bank for yonks andyonks (my stepdad nearly lost his money when National and westminster merged in 1973)

the point is that should the interest rate we pay be affected by the ratings agencies??

[scaryteacher]

See here
www.telegraph.co.uk/finance/comment/alistair-osborne/8814463/Its-time-we-ignored-Moodys-Fitch-and-Standard-and-Poors.html

Article in the DT saying ignore them.

[MoreBeta]

To be fair the rating agencies only really confirm what sophisticated investors already know. Credit officers inside banks talk to each other all the time, money market desks know which banks are desperately seeking money on the interbank market. Traders are trading credit derivatives that take bets on the credit quality of govts and large corporations and banks.

In essence the markets already know who is a good/bad credit risk many months before rating agencies deliver their judgement.

[TalkinPeace2]

morebeta
I would belive you if I'd not watched LOTS AND LOTS of professional advisers pile their money into Iceland and Madoff
personally I think they are all sheep

[MoreBeta]

Yes investors/advisors are very like sheep. Some sheep are at the very back of the herd and rating agencies are among them.

[ElenorRigby]

An global economic war is raging. The credit ratings agencies are just one of the players.
Both the US and European are teetering on the edge.
The credit agencies HQ's are all in New York. They are just looking after their own by diverting attention from the USA's woes to this side of the Atlantic.

Ignore and do not trust!

[ElenorRigby]

What I meant to say is ignore the Brit bank downgrades especially.

Yep Britain is up to it's chest in the Brown stuff, whereas the US and Eurozone are up to their necks and nose's respectively.

Expect bad stuff to happen in Europe very soon ie Dexia and French banks exposure to Greece, Slovakia pulling the plug on the EFSF (European Financial Stability Facility) Greek default and Germany picking its ball up and walking.

Meanwhile over in the US, well they ain't far behind.

Strange days indeed.

Thank fuck we never adopted the Euro, the one sensible thing Gordo McRuin did!

[TalkinPeace2]

Elenor
I agree about the Euro - my mortgage rose to 15% the night the UK left the snake ....
BUT Broon should still be strung up (along with Bliar) for encouraging thicko Dubya into further deregulation.

The ratings agencies may have their HQ's in NYC, but their most aggressive operators are in London (because of the utterly anachronistic Non Dom rules)

Actually, there is a thing that Osborne the wallpaper man could do.
He could bring UK tax law into line with the USA and abolish Non Dom.

You want the tax break, you piss off out of the country for 270 days a year
and take your scrawny wives with you.