Maurice A Johnson
Aug 26, 2009
Rating agencies are glorified analyst-shops - if investors trade on their recommendation rather than review the company fundamentals - caveat emptor.
The crisis was that ratings were assigned to tiers of structured notes that were assumed would not get eroded in the cash waterfall. It was not contemplated that there would be a complete market lack-of-confidence.
Sovereigns are sovereigns - they can always tax and issue bonds - to reduce the US AAA rating is silly-talk.
AAA debt
Aug 17, 2009
Maybe we should concentrate on the poor quality of research that has permiated Wall Street for generations .
CFA designations have never empowered analysts to ever have prescient guidance
RC
Aug 17, 2009
Salesmen (hypesters) take advantage of the human tendency to oversimplify. How about dis-aggregating the overall rating "grade" into subcomponents?
J.I.Seligman
Jul 22, 2009
Perhaps its not a matter of rating agencies being needed or not, but a matter of to what extent they are needed.
A simple investor is not able to conduct the quantitative research that an agency analyst can do. Not to say the analyst will be right, it's just a general benchmark. The danger as we know is that this can lead to blind trust in those who set the standards.
Suggested Solution: More competition - not less or a lack of it.
Juan Truden
Jul 22, 2009
No, he is not talking about self-regulation. He is trying to say that somehow investors should not pay so much attention to rating agencies grades. And he's right, plus it would take pressure off the agencies, so they could and would make better, cleaner, ratings.
Brian McGlynn
Jul 22, 2009
Sounds like self regulation to me! The market which David is saying should provide investor driven assessment of investments also failed to see the risks in the players that failed.
