+1. I can't really say more than that. Words wouldn't do it justice.

The people who rate bonds are clueless.
The not-worth-their-paper mortgage backed securities that got us into this mess were rated AAA.

AA? Pfft. Should be considered Junk... UK is basically just Iceland on roids.

*snerk*

Subby owes me a new monitor. Over in zero.

I work with, but in nowhere near the same field as a lot of moodys analysts and sales. They earn a ridiculously small amount compared to the average salary in the financial sector, much less than a low-level banker for example. They are the ones who haven't got the neccessary skills to work at the action end of the financial world, or more rarely are learning the ropes before moving on. Some of them are nice but most have that slow witted/ doormat quality. And cheap suits.

What's the USA's credit rating these days?

B .. for Bush?

farkforward: And cheap suits.

First read that as 'cheap sluts' ... leaving disappointed.

Delphis: What's the USA's credit rating these days?

B .. for Bush?

In jeopardy.

Rickmansworth: AA? Pfft. Should be considered Junk... UK is basically just Iceland on roids.

With a taxbase they can squeeze like a wet beach towel to avoid defaulting.

pheed

I think you can legally shot in the uk for hugging Jack Daniels. I know everyone involved would feel it was justified.

UK and bond rating and no 007 jokes? That's a fail.

You'd drink that much, too, if you were a British guy and had to look at British women, 99% of whom look like they shared a womb with a warthog.

Anhydrous Dihydrogen Monoxide: Rickmansworth: AA? Pfft. Should be considered Junk... UK is basically just Iceland on roids.

With a taxbase they can squeeze like a wet beach towel to avoid defaulting.

don't forget mervyn king's printing press

This would be one of those same ratings agencies that effectively said mortage backed derivatives were unbelievably great ideas and everyone in the world should buy them, right?

How the hell are they even still in business right now?

xria: This would be one of those same ratings agencies that effectively said mortage backed derivatives were unbelievably great ideas and everyone in the world should buy them, right?

How the hell are they even still in business right now?

That's my question as well. I work in an area related to credit risk ('getting a kick out of these replies', etc.) and the fact that the ratings agencies are still standing boggles my mind.

The most annoying part is their hiding behind the 1st Amendment (in the U.S.) and are basically saying all their Ratings are only "Opinions" and "It's not our fault".

Very very technically, their position is correct. But that is NOT how The Industry treated their ratings, nor how they marketed themselves. Yes, Banks had to do their own Due Diligence, but PART of due diligence was/is checking the Rating.

Do you expect me to default?

No, Mr. Bond. I expect you to die!

/got nuthin

xria: This would be one of those same ratings agencies that effectively said mortage backed derivatives were unbelievably great ideas and everyone in the world should buy them, right?

How the hell are they even still in business right now?

Anyone with a semi-functioning brain looks deeper than just the credit rating of an investment. It was obvious years ago that these bonds weren't AAA material, just check out the numbers of Fark threads alone on the insanity during the bubble, but Wall Street and Main Street as a whole only looked at the credit rating and ignored all the other signs that were out there that put those ratings into question.

Rickmansworth: AA? Pfft. Should be considered Junk... UK is basically just Iceland on roids.

Close, but no cigar. The UK is an absolute return fund with a lousy manager, Iceland was a massive hedge fund with Tyler Durden at the helm.

Unfortunately for subby, one notch below AAA is AB2+gl. Three notches down is where you get to double-A.

/No it isn't. Good joke, subs.

nlscb: Do you expect me to default?

No, Mr. Bond. I expect you to die!

/got nuthin

7/10, considering the lack of effort in the thread thus so far...

ObscureNameHere: xria: This would be one of those same ratings agencies that effectively said mortage backed derivatives were unbelievably great ideas and everyone in the world should buy them, right?

How the hell are they even still in business right now?

That's my question as well. I work in an area related to credit risk ('getting a kick out of these replies', etc.) and the fact that the ratings agencies are still standing boggles my mind.

The most annoying part is their hiding behind the 1st Amendment (in the U.S.) and are basically saying all their Ratings are only "Opinions" and "It's not our fault".

Very very technically, their position is correct. But that is NOT how The Industry treated their ratings, nor how they marketed themselves. Yes, Banks had to do their own Due Diligence, but PART of due diligence was/is checking the Rating.

I have no problem with them hiding behind the 1st Amendment they should be free to provide a ratings service - the question is why people (especially governments) are still giving them business. I know the EU made some noises about creating some alternative ratings body, but of course any government created body might have credibility problems (especially at first). However given that, for me at least, asking some random guy off the street whether a bond is any good would give it more credibility than S&P or Moody's opinion, you wonder why governments haven't looked more urgently at finding a way to remove such corrupt (or massively incompetent, take your pick) entities from the system.

I still give George Soros a AAA rating.

Funk Brothers: I still give George Soros a AAA rating.

Me too; he made $800 million last year.

S&P are on the ball, as usual lol.

And this sarcastic text goes along with the picture at Barren's;

S&P Cuts UK's Credit Outlook to Negative...We're Shaking In Our Boots

The fact that the major credit ratings agencies still make news is one of the more peculiar financial topics of the 21st century. After being worthless during the credit crisis and then being labeled worthless after the fact by the media, somehow S&P's cut of the UK's credit outlook to negative is reverberating through global markets today. And now investors are wondering if the US is next.

Without laying out a thousand more reasons why no one in the world should pay attention to this, below we highlight a chart of the credit default swap (CDS) price per year to insure $10,000 of UK sovereign debt for 5 years. Since default risk peaked in late February, the cost to insure UK debt is down 50%! The S&P outlook cut today moved the CDS price from 72 bps to 82 bps. This move barely shows up on the chart and highlights that the bond market surely doesn't care about S&P's call. And where the heck was S&P prior to and during the 900% (yes 900%!) rise in UK default risk in 2008 and early 2009? (new window)

/lol

Why Would I Read the Article: You'd drink that much, too, if you were a British guy and had to look at British women, 99% of whom look like they shared a womb with a warthog.


I'm a good looking British woman getting drunk tonight so I'm getting a kick...

Homer: "Hi, my name is Homer, and I'm an alcoholic"

Sarcastic Guy: "Sorry buddy, you want AA, this is AAA"

I blame Rick Pitino.

theoutlaw: I'm a good looking British woman getting drunk tonight so I'm getting a kick...

Says you.

You sound fat to me, most likely caused by getting drunk all the time and eating steak and kidney pie and bangers and mash.

theoutlaw: Why Would I Read the Article: You'd drink that much, too, if you were a British guy and had to look at British women, 99% of whom look like they shared a womb with a warthog.


I'm a good looking British woman getting drunk tonight so I'm getting a kick...

If you're saying this, then I would REALLY hate to know what you consider bad looking.

Rickmansworth: Anhydrous Dihydrogen Monoxide: Rickmansworth: AA? Pfft. Should be considered Junk... UK is basically just Iceland on roids.

With a taxbase they can squeeze like a wet beach towel to avoid defaulting.

don't forget mervyn king's printing press

Aye, that's the difference. Iceland's debts? Generally denominated in Dollars, Euros, Pounds, what have you. Something Iceland has to earn.

The UK? Generally, people have been willing to accept debts denominated in Sterling. This may cease.

That's what a default would look like for the US or UK. Other people stop buying dollar/pound-denominated debt for fear that it'll go Weimar. Which would be self-fulfilling.

Should the U.S. sovereign credit rating be downgraded?

Link (new window)

This was written before the current economic downturn and spiralling out of control national debt.

That's not true, when I went over there most of them were drinking way less than me.

...damn...

Not sure why there's all these drinking references...

http://www.theaa.com/ (new window)