Rating agencies are more or less out-sourced research houses - performing work that would be too costly for others to do by themselves. It an "economies of scal

Rating agencies are more or less out-sourced research houses - performing work that would be too costly for others to do by themselves. It an "economies of scale" type thing and someone would have do this research. So, to say that "their ratings are not supplying any useful information" is absurd. There is an extremely high correlation between default rates and ratings. Admittedly some of the fees for ratings are absolutely ridiculous. When you're doing a structured finance deal for $X billion, then 25 basis points is neither here nor there, but in $ value terms is a crap load of money. Rating agencies are cash cows, and that may be part of the problem. I worked for a rating agency for a couple of years.