newellm

Barron's Critique of Rating Agencies Fails the Test

The entire foundation of debt is currently based on FICO scores, incomes, corporate financial statements, appraisals, etc. NONE of these things take into account FUTURE macro-economic changes, all are based on the PAST.

As long as any large fundamental issue is mis-understood by the general society, all the ratings will turn out to be crap.

As long as entire industries experience "black swan", "we never imaged" moments, the ratings will always be great until they are simply crap.