Subject: »NEWS AROUND THE WORLD

Moodys agency to be judged in Italy..sorry its in spanish


great, now not only the economists we might see how this agency makes a great especulation, to up or down the price of the debt of different countries, moody the world dosent need you to know wich country is more or less sure, because a new invent called "internet", only thing moodys is usefull is for especulating and fxxing the debts interest of different countries


ireland and greece, now portugal, thank you moodys for making our crisis harder

The rating bureaus certainly made mistakes (and they still do, as they lowered Greece's rating to CCC), but if you're economy is healthy, you won't have problems with the bureaus :')

Spain always is on rumour about moodys putting down spanish category, curiosly rumours start always that spanish gov decides to sell debt

in my opinion moodys helps US economy by fxxxing other economys.


maybe in the past it was usefull like:" i want to invest money on ecuador in 1950, as internet dosent exiosts i want information about ecuador´s economy". But nowadays moodys only usefull is helping USA economy

They have threatened to lower the Belgian rating too, however, after more than a year without government, we still have the top rating. If the fundaments of the economy are healthy, you'll stay out of problems. (but I want to point out again I do think the rating bureau's (Moody's, S&P's) have a huge uncontrolled power)
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i think Spain is still on top rating too, but with continous rumours about putting down it by moodys


i agree they dont have that huge power..but they have enough power to change the interest of a public debt just by chancing thei clasifications, as they did with portugal recently. As we have the same coin and integred economys, it affects all of us negativily, and in crisis times , we sholudnt let Moodys or anyone doig this, so im happy with italian movement about it :)

They (Moody's, S&P's) should be fully rational and independent. Now, they are just pushing the countries back.

However, the southern European countries (Greece, Portugal, Spain) must realize their economy just was not strong enough (for instance the Greek economy is not competitive at all, they will have to accept the situation of before the crisis is not possible). That's why I'm in favor of very severe criteria countries must meet.

Those rating bureaus are crap imo. They gave Lehman brothers AAA ??? And the US gets an AAA rating with a debt so high?

Once read an article with chinese rating bureaus in it. The US only got a mere A+.
I'm with Valenciano here. Those rating bureaus came out of nothing and made themselves incontournable, what a show. off with them =p

Never thought about it, but they are indeed a formidable instrument which could be used like a political weapon. However, it's up to the market to trust them: if they step too far out of line, they'll lose their position.

However, it's up to the market to trust them: if they step too far out of line, they'll lose their position.

That's the problem. They don't. Rating Greece as CCC is really just not rational.
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I beg to differ, it's very rational. Greece shall most likely be unable to service its debts, let alone repaying any of them. You will have to realise that most loans will eventually turn into gifts. I'd say 'CCC' reflects that reality.

Why wouldn't Greece be able to repay its debt? The problem with countries is that, unlike companies, we only look at their profit & loss account (GDP and other ratios to GDP). Each country, the same as any company, has also a balance sheet where assets (land, natural resources, cultural heritage and all other state owned asssets) are much, much larger than its liabilities (public debt). If Greece cannot service its debt from P&L, they should sell their assets (land, Acropolis, coast and islands etc.).

A part of the loans won't be paid back, yes. However, CCC is really overreacting for a country in Eurozone.

The credit rating reflects the ability to repay WITHOUT selling certain assets.

So far, the Eurozone has justified every C twice over by not accepting the consequences of a shared responsibility for the euro. The Netherlands and Germany are the most sorry examples of this fact. As long as a political union does not exist alongside the monetary union, each and every country must be considered on its own merits.

The credit rating reflects the ability to repay WITHOUT selling certain assets.

That's exactly why you can throw these country ratings in the trash. What if a country lies on oil which it didn't even begin to use? Wouldn't that be kinda important for its credit rating?

Countries should make balance sheets same as companies do. This way we miss at least half of information for any economic conclusion.

You will have to accept that it is impossible to know all relevant facts, worse, the future itself is largely unpredictable. Hence, any credit rating, which is about future capability of repayment of debts within a limited amount of time, relies on uncertain premisses.

The uncertainty of it does not make it worthless. On the contrary, it derives its worth from it. As long as there is a market out there which is willing to pay for credit rating, someone will oblige the market.