Comments on: Where the ratings agencies went wrong… http://larvatusprodeo.net/2008/09/17/where-the-ratings-agencies-went-wrong/ Life, Culture and Politics from BrisVegas Tue, 14 Feb 2012 07:31:18 +0000 hourly 1 http://wordpress.org/?v=3.3 By: Andrew Reynolds http://larvatusprodeo.net/2008/09/17/where-the-ratings-agencies-went-wrong/#comment-216894 Andrew Reynolds Fri, 19 Sep 2008 03:54:21 +0000 http://larvatusprodeo.net/2008/09/17/where-the-ratings-agencies-went-wrong/#comment-216894 Robert, The US has the luxury of having its debt denominated purely in its own currency. <em>In extremis</em> it could satisfy the debt just by resorting to the printing press. A US default would be as unlikely as them running out of paper to print it on. That said, any resort to the presses would result in massive inflation, which may be a technical default. Robert,
The US has the luxury of having its debt denominated purely in its own currency. In extremis it could satisfy the debt just by resorting to the printing press. A US default would be as unlikely as them running out of paper to print it on.
That said, any resort to the presses would result in massive inflation, which may be a technical default.

]]> By: carbonsink http://larvatusprodeo.net/2008/09/17/where-the-ratings-agencies-went-wrong/#comment-216893 carbonsink Fri, 19 Sep 2008 02:03:14 +0000 http://larvatusprodeo.net/2008/09/17/where-the-ratings-agencies-went-wrong/#comment-216893 <blockquote>Carbonsink: Murph does have a bit of a point about professional contrarians</blockquote> Sure, Faber et al have predicted 10 of the last 3 recessions -- we all know that -- my point is, the permabears were pointing out very real risks in the financial system, which were completely ignored by the regulators. My view is the permabears were going to be right eventually, and they'd get the reasons for the crash spot on, its the timing they got wrong. Bubbles always last longer the the doomsayers expect.

Carbonsink: Murph does have a bit of a point about professional contrarians

Sure, Faber et al have predicted 10 of the last 3 recessions — we all know that — my point is, the permabears were pointing out very real risks in the financial system, which were completely ignored by the regulators.

My view is the permabears were going to be right eventually, and they’d get the reasons for the crash spot on, its the timing they got wrong. Bubbles always last longer the the doomsayers expect.

]]> By: Robert Merkel http://larvatusprodeo.net/2008/09/17/where-the-ratings-agencies-went-wrong/#comment-216892 Robert Merkel Thu, 18 Sep 2008 23:23:36 +0000 http://larvatusprodeo.net/2008/09/17/where-the-ratings-agencies-went-wrong/#comment-216892 From what I understand, if it was any nation other than the USA it would have lost its triple A credit rating a while ago. But I suspect that the US would be the ultimate "too big to fail" global instituteion... From what I understand, if it was any nation other than the USA it would have lost its triple A credit rating a while ago.

But I suspect that the US would be the ultimate “too big to fail” global instituteion…

]]> By: Down and Out of Sài Gòn http://larvatusprodeo.net/2008/09/17/where-the-ratings-agencies-went-wrong/#comment-216891 Down and Out of Sài Gòn Thu, 18 Sep 2008 23:16:20 +0000 http://larvatusprodeo.net/2008/09/17/where-the-ratings-agencies-went-wrong/#comment-216891 <a href="http://forexblog.oanda.com/20080918/is-the-us-%E2%80%9Caaa%E2%80%9D-rating-at-risk/" rel="nofollow">Is the US "AAA" credit rating at risk?</a> Reality or overcompensation? Is the US “AAA” credit rating at risk?

Reality or overcompensation?

]]> By: Robert Merkel http://larvatusprodeo.net/2008/09/17/where-the-ratings-agencies-went-wrong/#comment-216890 Robert Merkel Thu, 18 Sep 2008 23:05:23 +0000 http://larvatusprodeo.net/2008/09/17/where-the-ratings-agencies-went-wrong/#comment-216890 Carbonsink: Murph does have a bit of a point about professional contrarians. At any given time you can find people who will predict financial markets are about to boom, bust, or go sideways. Depending on what happens, one of these three groups ends up looking like a genius and the best TV talent out of the group becomes a featured interview guest until the next gyration, where they get it wrong. Carbonsink: Murph does have a bit of a point about professional contrarians.

At any given time you can find people who will predict financial markets are about to boom, bust, or go sideways. Depending on what happens, one of these three groups ends up looking like a genius and the best TV talent out of the group becomes a featured interview guest until the next gyration, where they get it wrong.

]]> By: Graham Bell http://larvatusprodeo.net/2008/09/17/where-the-ratings-agencies-went-wrong/#comment-216889 Graham Bell Thu, 18 Sep 2008 20:30:59 +0000 http://larvatusprodeo.net/2008/09/17/where-the-ratings-agencies-went-wrong/#comment-216889 Robrt Merkel and All: Isn't it absurd? That thousands of millions of dollars can be shovelled into the furnace because of fairy-tales about creditwothiness of firms and "products" cooked up by lazy, ignorant or just plain gullible screen-jockies. And yet the credtworthiness of ordinary citizens can be destroyed because of a dodgy credit report based on incorrect, misleading, misunderstood, manifestly incomplete or cover-your-backside data. Of course there are some appeal mechanisms, just bring your own Charted Accountant and your Senior Counsel .... in other words, if you could afford to hire such eminent advisors, you would be driving a Jaguar and you wouldn't have to be applying for a loan to buy a barely-registerable $3000 rust-bucket. Credit reporting? GIGO: garbage in, garbage out. Time for a really severe crackdown on the operations of all credit reporting mobs. Once there has been a thorough clean-out of this credit reporting cess-pit, it will be safe again for ordinary citizens to borrow money and to invest their savings. Robrt Merkel and All:

Isn’t it absurd?

That thousands of millions of dollars can be shovelled into the furnace because of fairy-tales about creditwothiness of firms and “products” cooked up by lazy, ignorant or just plain gullible screen-jockies.

And yet the credtworthiness of ordinary citizens can be destroyed because of a dodgy credit report based on incorrect, misleading, misunderstood, manifestly incomplete or cover-your-backside data. Of course there are some appeal mechanisms, just bring your own Charted Accountant and your Senior Counsel …. in other words, if you could afford to hire such eminent advisors, you would be driving a Jaguar and you wouldn’t have to be applying for a loan to buy a barely-registerable $3000 rust-bucket. Credit reporting? GIGO: garbage in, garbage out.

Time for a really severe crackdown on the operations of all credit reporting mobs.

Once there has been a thorough clean-out of this credit reporting cess-pit, it will be safe again for ordinary citizens to borrow money and to invest their savings.

]]> By: murph the surf http://larvatusprodeo.net/2008/09/17/where-the-ratings-agencies-went-wrong/#comment-216888 murph the surf Thu, 18 Sep 2008 13:17:07 +0000 http://larvatusprodeo.net/2008/09/17/where-the-ratings-agencies-went-wrong/#comment-216888 Michael West in the SMH ( this reporter has done plenty of work on the background to the current problems )today has an artcile featuring the failures of the regulators. Calls for regulations are fine but if they aren't enforced they aren't going to make any difference. . http://business.smh.com.au/business/who-can-you-trust-20080918-4j12.html?page=fullpage#contentSwap1 Michael West in the SMH ( this reporter has done plenty of work on the background to the current problems )today has an artcile featuring the failures of the regulators.
Calls for regulations are fine but if they aren’t enforced they aren’t going to make any difference.
.
http://business.smh.com.au/business/who-can-you-trust-20080918-4j12.html?page=fullpage#contentSwap1

]]> By: murph the surf http://larvatusprodeo.net/2008/09/17/where-the-ratings-agencies-went-wrong/#comment-216887 murph the surf Thu, 18 Sep 2008 12:46:41 +0000 http://larvatusprodeo.net/2008/09/17/where-the-ratings-agencies-went-wrong/#comment-216887 Marc Faber has started making sense ? That he gets any media time at all is more a function of his manner and his funky dress sense than the contenst of his spiel. Dr Doom since the 80's and still going strong but at times like these suddenly the professional contrarian sounds so smart. Only in hindsight mind you . Marc Faber has started making sense ?
That he gets any media time at all is more a function of his manner and his funky dress sense than the contenst of his spiel.
Dr Doom since the 80′s and still going strong but at times like these suddenly the professional contrarian sounds so smart.
Only in hindsight mind you .

]]> By: carbonsink http://larvatusprodeo.net/2008/09/17/where-the-ratings-agencies-went-wrong/#comment-216886 carbonsink Thu, 18 Sep 2008 11:56:36 +0000 http://larvatusprodeo.net/2008/09/17/where-the-ratings-agencies-went-wrong/#comment-216886 <blockquote>It’s easy, with the benefit of hindsight, to shake one’s head at the flaws in the risk modelling that they did.</blockquote> Plenty of people have been shaking their heads for a long time, but no-one that was considered "credible" by the mainstream. I mean, Marc Faber and Bill Fleckenstein have predicted imminent global financial catastrophe for a long as I can remember, but no-one wanted to listen to the permabears while the giant Ponzi scheme was working .... even though a lot of what they were saying made a lot of sense.

It’s easy, with the benefit of hindsight, to shake one’s head at the flaws in the risk modelling that they did.

Plenty of people have been shaking their heads for a long time, but no-one that was considered “credible” by the mainstream. I mean, Marc Faber and Bill Fleckenstein have predicted imminent global financial catastrophe for a long as I can remember, but no-one wanted to listen to the permabears while the giant Ponzi scheme was working …. even though a lot of what they were saying made a lot of sense.

]]> By: Lefty E http://larvatusprodeo.net/2008/09/17/where-the-ratings-agencies-went-wrong/#comment-216885 Lefty E Wed, 17 Sep 2008 12:18:20 +0000 http://larvatusprodeo.net/2008/09/17/where-the-ratings-agencies-went-wrong/#comment-216885 Btw, a fairly reliable little birdy tells me Monash Uni is highly exposed - and has lost a PACKET today. Btw, a fairly reliable little birdy tells me Monash Uni is highly exposed – and has lost a PACKET today.

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