Skip to content

Raters of the Lost Ark

July 27, 2011

So I’m sure we’re all aware of the ongoing struggle regarding the debt ceiling here in the United States; the print and television media have been covering it extensively.

Why exactly is there concern if the debt ceiling isn’t raised? One possible outcome would be interest rates on credit cards increasing if the US defaults because the ratings agencies, which signal investors, would downgrade the US’s AAA rating.

But I have to pause and ask something: Why should we trust the ratings’ agencies? If I recall, it was debt agencies, such as S&P and Moody’s, that gave financial products a AAA rating even though they were nothing more than junk, contributing to one of the worst financial crises in history.

So why do we use these so-call ratings agencies? Well, maybe it’s because they have Wall Street’s backing to continue giving false ratings to junk, in order to move WS’s products more easily.

Advertisements
No comments yet

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: