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The linked article says it plainly: U.S. Treasuries are in a category of their own. But the facade of fair and uniform rules for all is important to keep, so ev
by inejge 3y ago
The linked article says it plainly: U.S. Treasuries are in a category of their own. But the facade of fair and uniform rules for all is important to keep, so everyone insists on the polite fiction of credit ratings. The cracks only appear when some external event, like the debt ceiling impasse, threatens to undermine that fiction.
- debacle 3y ago2007/2008 showed that there is incredible momentum in credit ratings, and that despite the "rules" there is a log scale relationship with rating, momentum, and risk. The A/B/C rating system might be more of a disservice than a 0-100 scale.
- sudosysgen 3y agoA quantitative scale is too easily backtested, criticized and compared, which means it would threaten the moat that these agencies rely on.
- maxerickson 3y agoHow is bad governance by the US government an external event for US treasuries?