Our chart of the day comes to us today via Bloomberg, looking at YTD performance of McGraw-Hill (parent co of S&P), Moody’s, and the S&P500 Index.
David Wilson observes:
“McGraw-Hill and Moody’s face two threats because S&P cut the U.S. government to AA+, Appert wrote yesterday in a report. The first is greater regulatory scrutiny of the rating industry, which has been criticized for flawed assessments of mortgage-backed securities during the past decade’s housing bubble.
“The perception in Washington that the rating agencies have too much power and must be ‘reined in’ will undoubtedly by reinforced by S&P’s decision,” he wrote.
The second risk is that bond sales may become more volatile as the lower rating helps slow economic growth, the report said. Assuming that occurs, revenue and earnings at McGraw-Hill and Moody’s would become less predictable as well.
As the chart above shows, the index has outperformed the two public rating agencies . . .
McGraw-Hill, Moody’s Risks Rise After S&P Cut: Chart of the Day
Bloomberg, August 09, 2011
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.