How can we expect ratings agencies to know what is junk?

Whats going on in the world around us
Post Reply
User avatar
morgenhund European Union
Häupl, Sackbauer, Krankl
Häupl, Sackbauer, Krankl
Posts: 4498
Joined: Sun Jun 12, 2005 8:00 am
Location: 1090, 1190
Contact:

How can we expect ratings agencies to know what is junk?

Post by morgenhund » Mon Jan 16, 2012 5:09 pm

There is an interesting article at http://www.voxeu.org/index.php?q=node/7527

"Economists have shown that wine tasters can’t tell Bordeaux from budget plonk, movie critics are prone to giving biased reviews, and Olympic judges are often judging what’s best for them to say rather than what’s in front of them. This column asks why we should expect credit-rating agencies, with their own unique set of ignorance and incentives, to be any different."


Vienna is like an Ikea sofa - you know you should upgrade, but why bother when it is this comfortable.

User avatar
Tatt Great Britain
Site Admin
Site Admin
Posts: 1843
Joined: Tue Feb 19, 2008 4:45 am
Location: 3rd District

Re: How can we expect ratings agencies to know what is junk?

Post by Tatt » Mon Jan 16, 2012 6:50 pm

I think the debate is a little emotional; a rating agency issues an opinion, nothing more.

When it comes to you and me ask Experian and you'll get hard credit data. The same for most companies and corporations.

When it comes to an opaque organisation like a government it is based probably 50% on relatively hard data (jobs, economics of major industries, balance of payments, etc.), and the other 50% on politics and gut instinct.

But at the end of the day it is an opinion, not a fact. The fact that people take them seriously is only for their own ends.

Again the media jumps up and gets the story right but the context wrong :-)

User avatar
Dagnamski
Professional
Professional
Posts: 390
Joined: Wed Aug 09, 2006 8:00 am
Contact:

Re: How can we expect ratings agencies to know what is junk?

Post by Dagnamski » Wed Jan 18, 2012 8:04 am

Us general public deserve a better media sooner rather than later. Remember it's always going to be corporate or state run propoganda with interests. Alternative news sources have been the way to go for quite some time, to cut the crap.

Rating agencies are used to rate what is junk, because apparently they are supposed to have an indpendant overview of things, with no spin. But everyone in finance sector has a short term view still with rosy glasses, because they still have hope - so that's not exactly realistic anyway.
When it all started last summer with 5 stars all round it was only going to go one way.

I'd say realistically you could put Austria at 2 or 3 stars to be rationally pessimistic. But it's only like a childs birthday badge or a workers name tag at McDonalds as we all live in the clouds now and we all see ourselves as good little workers.

The complete mismanagement in the last 2 years Europe to rush us into some Socialist superstate run by financial institutions has for me put the project completely off the rails, and if the future is to undemocratically put in people like Mario Monti in Italy (all transactions in Italy now limited to €1000 and going down to €0 in six months) it will leads to fashism, huge social unrest and war. Exactly what the supposed idea at the beginning of the project was idealogically meant to prevent, uhuh?! Although the gamble is that nothing will happen if the general public is so passive, mind controlled and accepting as they are now.

The foresight of the British Government to pull out of the whole thing is a wise decision because if you are not in control of your finances at a time like this, and nobody can agree on anything, it's a recipie for disaster. And the disaster just keeps getting bigger under the wise guise of Angela Merkl.

I mean we could all just keep pretending that everything is rosy, but ask small business owners, young people under 35 or older people and you'll get the real picture about the publics spending power at the moment and from that you can quite easily estimate we are in for a 10 year recession still from now. (that's 15 years in total minimum by my highly untrained estimate)

Technically speaking the banks should have been allowed to collapse and then then problem could have been dealt with at the source, and should have been made to be reponsible for their own misjudgment. The public should not have been made to be responsible for corporations failures to be repaid in taxes and it is all a game as we see what the possible end of Capitalism looks like.

We are all lead down the wrong path. Even those 'in the know' are not quite reading things right. Read alternative news with no corporate interests to get a clearer picture.

The biggest danger to our own futures is you and if you are prepared to accept what polititions are doing to your life and our future. I'd be giving protests, or better roits marks out of 5. It would be more useful. :lol:

User avatar
morgenhund European Union
Häupl, Sackbauer, Krankl
Häupl, Sackbauer, Krankl
Posts: 4498
Joined: Sun Jun 12, 2005 8:00 am
Location: 1090, 1190
Contact:

Re: How can we expect ratings agencies to know what is junk?

Post by morgenhund » Wed Jan 18, 2012 10:06 am

Interesting short-termism reflections there - this speech by Andy Haldane (BoE) last year makes similarly good reading http://www.bankofengland.co.uk/publicat ... ech495.pdf
Vienna is like an Ikea sofa - you know you should upgrade, but why bother when it is this comfortable.

User avatar
Berg
Newbie
Newbie
Posts: 11
Joined: Mon Jan 02, 2012 6:42 pm

Re: How can we expect ratings agencies to know what is junk?

Post by Berg » Wed Jan 18, 2012 5:02 pm

Dagnamski wrote: Technically speaking the banks should have been allowed to collapse and then then problem could have been dealt with at the source, and should have been made to be reponsible for their own misjudgment. The public should not have been made to be responsible for corporations failures to be repaid in taxes and it is all a game as we see what the possible end of Capitalism looks like.

We are all lead down the wrong path. Even those 'in the know' are not quite reading things right. Read alternative news with no corporate interests to get a clearer picture.
What alternative news sites would you recommend, Dagnamski?

Re: the banks, it is true they are still getting wildly remunerated etc. and most people who made a lot of money from the whole disaster are in well paid, safe jobs

User avatar
morgenhund European Union
Häupl, Sackbauer, Krankl
Häupl, Sackbauer, Krankl
Posts: 4498
Joined: Sun Jun 12, 2005 8:00 am
Location: 1090, 1190
Contact:

Re: How can we expect ratings agencies to know what is junk?

Post by morgenhund » Wed Jan 18, 2012 5:32 pm

Regarding the Austrian issue, it came as no great surprise given Austria's CESEE exposures. The "Too Big to Fail" (TBTF) issue will continue to be a hot topic for years to come. And of course we have seen monetary union without fiscal union.
Vienna is like an Ikea sofa - you know you should upgrade, but why bother when it is this comfortable.

User avatar
morgenhund European Union
Häupl, Sackbauer, Krankl
Häupl, Sackbauer, Krankl
Posts: 4498
Joined: Sun Jun 12, 2005 8:00 am
Location: 1090, 1190
Contact:

Re: How can we expect ratings agencies to know what is junk?

Post by morgenhund » Wed Jan 18, 2012 6:24 pm

Interesting comments about CESEE exposure by Eric Frey in today's Standard

http://derstandard.at/1326503010478/Kom ... estreitbar
Vienna is like an Ikea sofa - you know you should upgrade, but why bother when it is this comfortable.

User avatar
Dagnamski
Professional
Professional
Posts: 390
Joined: Wed Aug 09, 2006 8:00 am
Contact:

Re: How can we expect ratings agencies to know what is junk?

Post by Dagnamski » Wed Jan 18, 2012 8:47 pm

@ Berg.

If you like type in alternative news sources into a web browser, then pick and choose yourself.

About short termism. (Please understand i do not work in the banking sector like 2 out of 4 people posting so far). It is the polititions who suffer the most from short termism, they made the decisions and are the rulemakers that put the general public into debt and not the banks. Polititions are mostly responsible for the crisis as many statasticians could have told you the big crash was coming. I was told 10 years ago hush hush style and thought yeah whatever.
Short termism is a plague in politics because of so called 'carear polititions' who must look for their next election result. How many election promisises were ever kept by any leader you can remember? Almost none. Does that make them lying bastards or just not able to do what they wish? Probably a combination of both.
Because I am simple, the equation is to me very simple. Imagine bailout like a credit card. You get one card, you get in debt. So you get another card to pay off the debt in the first. Before long you are in debt again and get another and another and another. You loose, bank wins. Well done.
If the polititions had not allowed bailouts the debt would be less. There would be other banks a normal person could use to put their money into if they wish.
As for Europe, the longer the polititions take over making a decision, the worse the crisis becomes. This only benifits the banks. The right decision immidiately is ultimately the cleverest and it doesn't have to be loaded or complicated. As for the future of Europe it goes one of two ways. Your guess is as good as mine, it's too complicated an issue for my tiny braincells to handle. The worst thing is that there have been so many laws introduced recently to help big business and banks tighten the noose around innocent people. Laws which would completely go against the grain of the wisdom laid down in law out of living memory by generations before, who have seen the same things happening. It's about greed, control, power and ultimately the sacrifice of you and your personal freedoms.
I hate misleading polititions, and I hate greedy banks, so it's probably better I log off before I go on a digital rampage :arse: .

User avatar
Dagnamski
Professional
Professional
Posts: 390
Joined: Wed Aug 09, 2006 8:00 am
Contact:

Re: How can we expect ratings agencies to know what is junk?

Post by Dagnamski » Wed Jan 18, 2012 10:41 pm

@ Tatt
As for Experian, when i first moved to cental London after completing my degree to work in the hi tech bubble i was refused a 500BP loan to make a downpayment for rent because they were clever enough to have collected data on me and though I was a proper poorper. Very accurate. That's all I know about Experian. I had no idea they they were even doing that and how they misguidedly controlled the bank. That's just my personal case. :oops: I actually avoided bank loans after that because I got an insight into how they operated.

User avatar
Berg
Newbie
Newbie
Posts: 11
Joined: Mon Jan 02, 2012 6:42 pm

Re: How can we expect ratings agencies to know what is junk?

Post by Berg » Thu Jan 19, 2012 7:25 pm

Rave away, I always like to hear alternative viewpoints - adds welcome perspectives.

I thought you would have a recommended source, there are also some very uncredible alternate 'news' sites as well, hence the question. But OK either way. Ta.

User avatar
Dagnamski
Professional
Professional
Posts: 390
Joined: Wed Aug 09, 2006 8:00 am
Contact:

Re: How can we expect ratings agencies to know what is junk?

Post by Dagnamski » Thu Jan 19, 2012 8:15 pm

I see real information, sometimes days or weeks before the usual media outlets pick it up. Of course some are zany or extreme, you must filter for yourself as with normal news sources as you wish. I basically follow key people on topics that interest me in key positions to get real facts.

There just is a difference between accepting what you are fed and thinking about what you are fed. This is of course the new age of information and the new generations will hopefully still be able to do this. (There'll be more crazies like me OMG!)

Some of the points I posted on this thread might be a bit outlandish or reactionary, but we really are in the shit right now, at a huge turning point. You can accept what you get, or you can create the world in which you want to live. I like to create and don't believe in a thing called fate, but i do believe in a word called freedom.

When the ratings first started flooding in after the summer it really turned my cog that the normal media outlets jumped on this as some kind of useful indicator to report that some blokes in an office thought they were clever enough to roughly sum up the situation. People start repeating and believe what they are told. I find this dangerous. Europe is going right down the pan. You can hang on, or you can fix it.

I believe in the way the Icelandic banks dealt with it. They are free of the problem for quite a time now, but ours is a never ending saga sucking all the resources and will powers out of nations. What is better I ask you?

Sorry if i offended anyone in the previous mindless rambles. :D I do not wish for bankers to loose their jobs, I just wish the proper regulations were put in place, or reasonable regulations that were there, not broken. But why should old people have no money left in their pension funds, how can they survive? Why should young people who want to learn and go to university have no chance any more? Why should the profits of major banks be better than ever before after bailouts and the *expletive* wack their bonuses up so they can buy an island in the pacific and retire comfortably whilst I sacrifice a business, split up a family and have to start all over again to pay for other peoples corporate mistakes. I don't think I fcuking should, and nor should you!

I think we have a bunch of very scared polititions everywhere right now, with no balls, and no good ideas. I'm really sick of it. Until politics started effecting my life in a big way I didn't care, unfortunately for some now i do.

Quote:
'Sometimes when you are in the middle of a forest, you can't see the way out.'
by some guy who got stuck in a forest

User avatar
Berg
Newbie
Newbie
Posts: 11
Joined: Mon Jan 02, 2012 6:42 pm

Re: How can we expect ratings agencies to know what is junk?

Post by Berg » Fri Jan 20, 2012 12:23 pm

Dagnamski wrote:I just wish the proper regulations were put in place, or reasonable regulations that were there, not broken. But why should old people have no money left in their pension funds, how can they survive? Why should young people who want to learn and go to university have no chance any more? Why should the profits of major banks be better than ever before after bailouts and the *expletive* wack their bonuses up so they can buy an island in the pacific and retire comfortably whilst I sacrifice a business, split up a family and have to start all over again to pay for other peoples corporate mistakes. I don't think I fcuking should, and nor should you!
It's nice to see someone who cares about more than Numero Uno & Family - so thanks.

Banking bonuses during the heyday were through the roof - unbelievable figures. Those rewards are of course banked so to speak - most or many Bank employees are not part of that game - but a lot also are.

Anyway I came across this today -- http://nakedsecurity.sophos.com/2011/02 ... anonymous/

I was also reading about the US Government's move to curb the internet - reference SOPA and US Government hits Megaupload

Clearly the internet is one of the methods by which people are able to access a lot of information. The desire to curb and illegalise this is not desirable IMO, and very disappointing. If it were to go ahead, I think it would affect developments/freedom of speech and information. Scary really.

Berg

User avatar
WienA
Professional
Professional
Posts: 346
Joined: Fri Sep 17, 2010 9:15 pm

Re: How can we expect ratings agencies to know what is junk?

Post by WienA » Wed Jan 25, 2012 11:45 am

The SOPA Bill looks to be shut down, if recent media reports are anything to go by..

Was This Topic Useful?

Post Reply