Unchanged, unpunished, unrepentant, unreliable:: Ratings agencies – authorised to take money under false pretences


A closeup taken on December 31, 2011 in Lille, shows triple

The two biggest rating agencies refused to say sorry for their role in the financial crisis that began in 2007-08, instead telling MPs that investors should not pay too much attention to what they say.

"Ratings are opinions. They are one piece of important information which is available to the market and investors, but there are many other pieces of relevant information around about credit decision making," Mr Crawley said.

"We have been clear that we do not expect an individual investor, or at the other end of the spectrum a sophisticated asset manager, to rely solely on what we provide."

Mr Taylor said that although ratings were a good indication of long-term credit worthiness, there was no guarantee that agencies would not miss things in the future.

"We don’t have a crystal ball. We can’t predict the future.

Ratings agencies Moody’s and Standard & Poor’s refuse to apologise to MPs for financial crisis

The simple truth is that, ANYONE who thought that Rating Agencies actually could predict the future, should have their shoelaces and belt removed immediately! The more complex version…that is no less truthful…is that no-one can predict the future, even with access to an infinite amount of data about the present or immediate past.

I am not sure whether I find their arrogance or ignorance more offensive and, in the view of their role in the financial crisis, wonder why their “opinions” still so sought-after and costly?

At Ontonix we offer a credible, quantitative, cost effective [on-line] alternative:

Ontonix: Ratings – From an Opinion to Science

   

Related articles

Enhanced by Zemanta

Complexity and change – appreciating the implications for strategic decision-making


In much of management and organisational theory, it is common for people to either be ignored or to suggest that behaviour and attitudes can be assumed to be homogenous.

In almost every news programme we hear or see in recent years will be reference to two key influences that s strategic thinker must be cognisant of; markets and economics.

I have to admit to increasing frustration in the way that the behaviour of the former and the assumptions of the latter are treated as if there is no human involvement whatsoever. Indeed, there seems to be a view that the actions of human beings can be rationalised as if they are akin to laboratory rats!

Markets and economics are constructs that have been developed by, normally academics, to theorise (and rationalise) the aggregate actions of human beings. The classic assumption is that if you collect enough data you will eventually develop a sufficiently robust theory which, albeit overly-complex, will be able to cope with every eventuality.

As the most recent crisis in markets should have taught demonstrated, the vast majority of the best thinkers in the world did not foresee the global financial crisis and its consequences for markets. For those who advocate the use advanced modelling, the reply to criticism of their failure to forecast the global financial crisis is to cling onto the blind faith in their models.

via Complexity and change – appreciating the implications for strategic decision-making – Birmingham Post – Business Blog.