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Moody's downgrades Ireland debt to junk status

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Moody’s Investors Service is corrupt. They issued fraudulent ratings ratings on crap, Moody executives who questioned what their company was doing were punished and they have even been accused of blackmail by companies complaining about having to pay Moody's for ratings or get a "free" rating from Moody's that gives them a low rating.

Moody's is controlled by Berkshire Hathaway, Warren Buffett.

-1 ( +0 / -1 )

Moody's should downgrade themselves to junk status.

1 ( +2 / -1 )

Moody’s Investors Service is corrupt.

The entire financial industry is corrupt, and so is are the governments that supposedly regulate it. Probably the only really safe honest and honest institutions are the ones in the Cayman Islands, because a high percentage of their clients are professional criminals who you don't cheat if you want to go on living. As for us other peons, take your money out while you can, convert it to gold and conceal it under your mattress. Don't forget the old adage, "No one's life, liberty or property are safe while the legislature is in session." (Gideon J. Tucker)

3 ( +3 / -0 )

Moody's and Standard & Poors have gone from being totally lax and irresponsible in their ratings (during the boom) to being overblown and alarmist now, which is having the effect of creating economic meltdowns, sort of a self-fulfilling prophesy. As a result borrowing rates for troubled European countries like Ireland are spiking higher and higher.

-1 ( +0 / -1 )

Ireland bonds are garbage and I don't know anybody that would see them as a safe investment, same goes for the rest of PIIGS. Moody's has dropped the ball enough to justify any amount of suspicion but even if you ignore their rating the market speaks for itself, the nations with the largest welfare systems are falling like dominoes and they're dragging the rest of the EU down with them.

As a result borrowing rates for troubled European countries like Ireland are spiking higher and higher.

The runaway borrowing was happening well before their credit took the hard plunge. Markets tend to lag more often than lead and the economic ruin of many European nations has been long in the making.

1 ( +1 / -0 )

What were the Irish expecting?

Bubbles burst.

0 ( +1 / -1 )

TheQuestion: Ireland doesn't have a large welfare system. The problems arose because of bad management decisions by Irish banks and as result the Irish people have had to suffer the consequences.

1 ( +1 / -0 )

The problems arose because of bad management decisions by Irish banks and as result the Irish people have had to suffer the consequences.

But like most EU members it's banking and financial system is under the control of the European Central Bank and it's own Central Bank of Ireland which have been promoting unstable lending policies for years. This problem is similar to the mismanagment executed by the Fed but is more pervasive as it involves the economies of multiple nations and has been far more inflexible in it's responce to the financial crisis.

0 ( +0 / -0 )

TheQuestion: controlled? you mean supervised, right?

Rules are killing businesses and absence of rules is killing economies. Wait for the next bubble and nobody will remember what happened and ask to remove any rules until the next burst.

0 ( +0 / -0 )

Moody's, I though they were talking about the JAV production company Moodys...

1 ( +1 / -0 )

The problem with the ratings agencies is they don't pay well so the staff they have are pretty poor quality and easily manipulated and their models are often years behind the market, but the market does respond to their conclusions despite their dubious value. That Ireland had the top Aaa rating 2 years ago should tell you how dependable these are.

1 ( +1 / -0 )

The Moody ratings are pretty much useless and far from reality. The financial infra structure in Europe is a mess. Member nations who thought they would have a permanent free ride have caused a disaster. Look what happened to the euro. The dream of a united europe is turning into a nightmare.

0 ( +0 / -0 )

What? Not one joke about the Irish and junk status?

0 ( +0 / -0 )

The Irish bonds are indeed junk. Greece restructuring was a default and S&P actually called it so.

Rating agencies were accused of being lax and irresponsible before the crisis. Now they are being accused because they started doing their jobs but governments and banks around the world are panicking.

0 ( +0 / -0 )

Moody's, I though they were talking about the JAV production company Moodys.

They've issued warnings on junk status before as well.

0 ( +0 / -0 )

Moody's are the same firm that gave Leeman Brothers an A rating right until they filed for bankruptcy. So the question is, who are they to make any call like that? Why does the economic sector and the mainstream news still take them seriously? They are partly responsible for the financial meltdown in the first place. You have to wonder...

1 ( +1 / -0 )

Why are govts just more assertive. Shut 'Moody's' and their ilk down.

-3 ( +1 / -4 )

Shut 'Moody's' and their ilk down.

Why? Its provides bond scoring and most of the time the information is useful. I won't defend their issues in the past but I will say that most of their ratings have been solid and while I don't use their findings exclusively in my investing it does provide another source of insight. Moody's analyzes risk and you don't have to listen to them anyway. Feel free to go out and buy Irish bonds.

0 ( +0 / -0 )

Why does America still have a AAA rating? It's literally in worse financial shape than Greece.

0 ( +1 / -1 )

@TheQuestion: Useful? HA HA HA

-1 ( +1 / -2 )

Why does America still have a AAA rating?

It's not a measure of success or debt it's a measure of how likely that bond issuer is to pay on it's debt. The U.S, despite having massive debt problems, has never defaulted... well I take that back, it did miss a payment on about 120 million in treasury bills due to an technical error in 79 that caused the payments to go out a day or so late but the problem was quickly rectified. Point stands though, despite it's problems the U.S is still a dependable payer which is why it maintains a AAA rating.

In contrast the Greeks have put very real consideration to allowing their debts to default entierly. Ireland similarly has been so mismanaged though the European Central and it's own Central Bank that default is a very real possibility. The U.S's budget squabble is merely political and very few believe it will actually allow a default to occur.

Useful? HA HA HA

So what do you use for investing purposes? Do you just pick a country or company that sounds good while ignoring their ability to make good on the debt? Using all information available is pivitol to sound investing strategy. If you want to disregard ratings, market indexes, and basic economic indicators feel free but I personally use every source of information I can get.

0 ( +0 / -0 )

So what do you use for investing purposes? Do you just pick a country or company that sounds good while ignoring their ability to make good on the debt?

I don't know about you but the way I choose my investments is I stick a map of the world up on the wall and throw darts at it. I believe that is what they do at Moody's too, the only difference is the number of beers consumed beforehand.

0 ( +0 / -0 )

The U.S, despite having massive debt problems, has never defaulted...

But that's the point - if their ratings are largely determined by what has happened in the past then it shows their models are still worthless and they haven't learned anything from the subprime mess. This is why pieces of crap bonds backed by ARM given to people who could in no way afford them were given double A ratings as late as 2006.

Anyway as it stands, Moody's just put the US on review for a downgrade after the latest attempt to get compromise from the Republicans ended predictably so at least they're responding. However if the US in on review then almost every financial asset in the world should be equally on review because the impact of default would be catastrophic.

0 ( +0 / -0 )

But that's the point - if their ratings are largely determined by what has happened in the past then it shows their models are still worthless and they haven't learned anything from the subprime mess.

Ratings can only be based off of past performance. If we start speculating on the payment capacity or wealth we open ourselves up to even more subjectivity and corruption. Ratings change after decisions are made, not before. Moody's isn't my top choice and I've never relied on it as anything other than as a supplement to my other research but then they aren't meant to be used as an exclusive measure anyway.

Anyway as it stands, Moody's just put the US on review for a downgrade after the latest attempt to get compromise from the Republicans ended predictably so at least they're responding.

Take it with a grain of salt. A review doesn't really mean anything and so long as they resolve the issue in some capacity before the default I highly doubt anything would happen.

0 ( +0 / -0 )

Why does America still have a AAA rating? It's literally in worse financial shape than Greece.

I believe that too is under review by Moody's, if we haven't already been downgraded.

But of course, with the PC nonsense that substitutes for critical thinking these days, reporting something like that would "hurt" Obama, and that would mean Moody's is "racist."

0 ( +0 / -0 )

Ratings can only be based off of past performance. If we start speculating on the payment capacity or wealth we open ourselves up to even more subjectivity and corruption.

I'm sorry but I think this is just wrong. The whole point of a rating system is to determine future ability and willingness to meet cash flow demands. There are two parts to any analysis - quantitative and qualitative. The qualitative part is by it's very nature subjective - it's an analysts interpretation of the data they have available (which in the ratings agencies case is usually limited). The quantitative part is largely model-based is includes a number of assumptions which again are subjective. If the analyst feels they have a good reason to change the assumptions and can back it up, they will. However if your qualitative analysis isn't good, the assumptions that go into the models will also not be good. Both require some amount of forward-looking or they have no relevance. The situation we're in now is unprecedented in recent times.

Moody's isn't my top choice and I've never relied on it as anything other than as a supplement to my other research but then they aren't meant to be used as an exclusive measure anyway.

Are you talking about Moody's Investor Services (rating's agency) or Moody's Analytics? I hope it's the latter.

0 ( +0 / -0 )

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