Category: Bailouts, Regulation, Video

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3 Responses to “Bill Black: Rating Agencies “Harm The World” and Should Not Exist”

  1. Bill Wilson says:

    I liked this interview but I disagree with him on two points.

    1. You should not do the opposite of what the ratings agencies say. They are more like coincident indicators, or lagging indicators. Was it really news to anyone that we have zero political will to improve our fiscal situation? I agree with him that their rating are useless. Investors need to do their own due diligence or not invest at all.

    2. He seems fixated on this phony show down over the debt ceiling. As if it’s the only way that we can default. Why doesn’t the T-bill always trade at the exact same rate if there’s no risk for investors. I think it’s because bond investors care about inflation. Couldn’t inflation expectations push borrowing costs up for the government? At what point do borrowing costs eat up too much of our federal budget? Couldn’t that force us to restructure our debt?

  2. TripleSigma says:

    @Bill, good post, especially point #2. Nice to see someone gets it.

    I dont like his attitude, and most American’s attitude of ‘there is nothing to worry about’ we cannot default….. just run higher levels of debt to solve every problem. As if we are above recessions and the laws of economics.

    But yes, Rating agencies are not worth anything….

  3. TripleSigma says:

    Inflation is a form of default.