I see in the news today that Standard & Poor’s is threatening to lower the Eurozone credit ratings. I have found the behavior of the three credit rating companies to be quiet interesting since 2009 or so. There repeated pattern of behavior has that been of trying to prevent economic growth by repeatedly lowering credit rating of those countries how have found a solution to there economic issues. By doing this the credit ratings companies (they are nothing and never have been anything else) have made a bad situation worse in most cases. This for instance is a big contributor to the evolution of the sovereign debt crises in Europe.
This pattern has been repeated so often by all the three credit rating agencies that I am not in all surprised by today news. But the big three credit rating agencies also go up against banks, companies and so forward. That is also a interesting pattern of behavior. But I have not attended to much to that, as I find the pattern of the credit companies trying to collapse the sovereign states in Europe far more interesting.
It is a fact that the three credit rating companies hold total of 95% of the market. That is what I call a monopoly over the market and nothing else. The big three are, Standard & Poor’s, Moody’s, Fitch Group. All this three companies control the credit rating on states, debt and companies all over the world. What they can tell if a country gets out of this recession properly. This unchecked credit rating is raw power at its strongest. This also makes it possible for some investors to make a profit from the recession, as it moves along. Credit rating and connection with the banks and companies also needs to be explored properly. But this credit rating companies are owned by some really rich people and companies in the world. They do have a stake in it how credit ratings are formed and published.
All of this companies are based in the U.S from what I can tell. But for what it is worth. In my opinion, investigation into the credit rating agencies is needed. As there pattern of behavior is not according to logic from what I can tell. As the debt crises and the recession is getting solved. But at every turn the credit rating companies go out and make things worse by ignoring facts about economics, policy making and real numbers. In short, they ignore the facts and figures on what is going on in the world. To what end I do not know. But I suspect that it has something to do with profits somewhere.
More on this (along the lines).
S&P Temper Tantrum (Forbes)
Was S&P downgrade an act of revenge? (MSNBC)
How to Think About Standard and Poor’s Downgrade (michaelmoore.com)
Credit Rating Agencies: Senate Rules Banks Can’t Pick-And-Choose Raters (huffingtonpost.com)
Three examples of downgrade chutzpah (The Economist)
Downgrading the downgraders? Ratings, sovereign debt, and financial-market volatility (VOX)
Shares lower on eurozone fears (Herald Sun)
