5 ms·

Moody's? Is that the same credit rating agency which intentionally inflated credit rating for risky mortgage investment and eventually fined almost $1b[1]? It i

Moody's? Is that the same credit rating agency which intentionally inflated credit rating for risky mortgage investment and eventually fined almost $1b[1]? It is just so funny that an agency that has already destroyed its own creditability is still running around and doing credit rating for others. [1] http://www.abc.net.au/news/2017-01-14/moodys-agrees-settlement-over-pre-gfc-ratings/8182694 http://www.abc.net.au/news/2017-01-14/moodys-agrees-settleme...

mistermann 9y ago
Surprised this sentiment isn't more popular, they've proven themselves to be both dishonest and incompetent. This could also be state propoganda, the modern US being what it is.
- kybernetikos 9y ago
  > Surprised this sentiment isn't more popular, they've proven themselves to be both dishonest and incompetent. Maybe because the question of whether they are dishonest and incompetent is a less interesting ad hominem (ad companis ?) than the question of whether China can or cannot sustain its debt-fueled binge.
  - mistermann 9y ago
    Whether or not it's "interesting", the trustworthiness of the source seems rather important.
    - kybernetikos 9y ago
      > Whether or not it's "interesting", the trustworthiness of the source seems rather important. Not really. If the question is about the popularity of a sentiment, then of course the interestingness of the sentiment is relevant. But as with every argument, it's the quality of the argument that is important, not the arguer. The only way that the trustworthiness of the source is important is if you are unable to evaluate their argument based on other factors and were planning merely to trust them or key information they relied on based on their perceived authority which I agree would be a bad idea.
      - mistermann 9y ago
        Economics is far more complicated than most other fields, and you very often don't know the real "quality of the argument" until years later. So yes, in this case prior track record does very much matter.
cubano 9y ago
Yes I believe that would the one and the same. I find it very ironic that Moody is pointing a finger at China's "debt-fueled binge" when plenty of federal debt issues are staring us right in the face here in the US. The 8 years of Obama doubled a national debt that had taken about 230 years to accumulate. No regime in the history of America has even come close to that debt figure, and current US obligations looking forward cha-ching in ar around $200T more, far more then we can ever hope to afford. China, being a one-party communist rule, probably has a much better chance of fixing its issues then we do due to the lack of any political infighting. It's leaders can do whatever they need to fix budget shortfalls, irregardless of having to worry about reelections.
- martinflack 9y ago
  > The 8 years of Obama doubled a national debt that had taken about 230 years to accumulate. It's obviously bad to have out-of-control debt, but it's worth expressing national debt as % of GDP for two reasons: (a) the GDP of a nation is an engine to be used for repayment and (b) it accounts better for inflation (in periods that the nation is off the gold standard). In that context, the Obama years did not put us back up to the record (WWII). Here are some visualizations (I assume the data is correct, I'm not affiliated with this site): http://metrocosm.com/history-of-us-taxes/ http://metrocosm.com/history-of-us-taxes/
deepGem 9y ago
I think the only credible credit rating agency is Standard and Poor's. It'll be interesting to see how they react to this downgrade by Moody's.
- dis-sys 9y ago
  S&P is arguably worse - S&P was fined $1.5B for its shameful role before GFC, it refused to downgrade problematic assets because their business revenue relies on all those junk assets being rated AAA[1]. [1] http://www.bbc.com/news/business-31115174 http://www.bbc.com/news/business-31115174 Should I trust what S&P is saying given their track records like this?
  - deepGem 9y ago
    Oh man, thank you for bringing this to my attention. I thought they were the last credible source since they were the first to downgrade US sovereign rating in 2011 or 2012.

mistermann 9y ago

Surprised this sentiment isn't more popular, they've proven themselves to be both dishonest and incompetent. This could also be state propoganda, the modern US being what it is.

kybernetikos 9y ago
> Surprised this sentiment isn't more popular, they've proven themselves to be both dishonest and incompetent. Maybe because the question of whether they are dishonest and incompetent is a less interesting ad hominem (ad companis ?) than the question of whether China can or cannot sustain its debt-fueled binge.
- mistermann 9y ago
  Whether or not it's "interesting", the trustworthiness of the source seems rather important.
  - kybernetikos 9y ago
    > Whether or not it's "interesting", the trustworthiness of the source seems rather important. Not really. If the question is about the popularity of a sentiment, then of course the interestingness of the sentiment is relevant. But as with every argument, it's the quality of the argument that is important, not the arguer. The only way that the trustworthiness of the source is important is if you are unable to evaluate their argument based on other factors and were planning merely to trust them or key information they relied on based on their perceived authority which I agree would be a bad idea.
    - mistermann 9y ago
      Economics is far more complicated than most other fields, and you very often don't know the real "quality of the argument" until years later. So yes, in this case prior track record does very much matter.

cubano 9y ago

Yes I believe that would the one and the same. I find it very ironic that Moody is pointing a finger at China's "debt-fueled binge" when plenty of federal debt issues are staring us right in the face here in the US. The 8 years of Obama doubled a national debt that had taken about 230 years to accumulate. No regime in the history of America has even come close to that debt figure, and current US obligations looking forward cha-ching in ar around $200T more, far more then we can ever hope to afford. China, being a one-party communist rule, probably has a much better chance of fixing its issues then we do due to the lack of any political infighting. It's leaders can do whatever they need to fix budget shortfalls, irregardless of having to worry about reelections.

martinflack 9y ago
> The 8 years of Obama doubled a national debt that had taken about 230 years to accumulate. It's obviously bad to have out-of-control debt, but it's worth expressing national debt as % of GDP for two reasons: (a) the GDP of a nation is an engine to be used for repayment and (b) it accounts better for inflation (in periods that the nation is off the gold standard). In that context, the Obama years did not put us back up to the record (WWII). Here are some visualizations (I assume the data is correct, I'm not affiliated with this site): http://metrocosm.com/history-of-us-taxes/ http://metrocosm.com/history-of-us-taxes/

deepGem 9y ago

I think the only credible credit rating agency is Standard and Poor's. It'll be interesting to see how they react to this downgrade by Moody's.

dis-sys 9y ago
S&P is arguably worse - S&P was fined $1.5B for its shameful role before GFC, it refused to downgrade problematic assets because their business revenue relies on all those junk assets being rated AAA[1]. [1] http://www.bbc.com/news/business-31115174 http://www.bbc.com/news/business-31115174 Should I trust what S&P is saying given their track records like this?
- deepGem 9y ago
  Oh man, thank you for bringing this to my attention. I thought they were the last credible source since they were the first to downgrade US sovereign rating in 2011 or 2012.