How credit agencies work

[wallysk]

Terrific channel ! thank you so much 

[icutad2]

June's a woman. that's why she's more risky than terry.

[houdapurple]

i loooooooooooove these videos !

[clemb1309]

Great explanation!

[chrissis111]

I love these videos. Can you teaching videos on trading stocks and options? The forex too?

[Manjottoor007]

very very very intellectual and informative. thanks!

[notyouagain40]

Great job! Glad to see your videos back

[Ru5k1]

perhaps we should all stop drinking

[eppisgood]

You look like you need a drink.

[bassemhaikal]

BRILLIANT !! so happy u r back to Marketplace

[MrPlender]

Thanks! Great vid.

[deadbirdflyinghome]

Nice Explanation. Good in theory, but wrong in practice. Between 2002 and 2007, the top three credit rating agencies doubled their revenue, to more than $6 billion a year. They KNOWINGLY gave top rating's to toxic securities, AAA & AA to AIG and Lehman Brothers up until literally minutes before their collapse. Either they are INCOMPETENT and should NOT be rating ANYTHING, or they're a sell out. In light of the mysterious $6 billion dollars a year, I vote the latter.

[h1rschp]

@deadbirdflyinghome Can you be specific about what is wrong with the description? I don't disagree that the ratings agencies gave toxic securities inappropriately positive ratings, in fact I said exactly that towards the end. Curious to know what my error is here.

thanks

[deadbirdflyinghome]

@h1rschp Nothing of what you said I find wrong; In fact, I appreciate the explanation. Easy to relate to and clearly encapsulates the fundamental concepts. When I said wrong in practice I mean the very essence of the free market has been gutted and left out to dry. The titans in the market are bending all the rules for profit. For example free market dictates, you lose, you tank. But that never happened to the titans; They got bailed out. "Free" Market has died. the Rigged Market era has begun.

[ColossalCollapse]

yes its all well and good until filchy turns out to be a cunt

[W4rku5]

@deadbirdflyinghome indeed

[aksstar]

Wonderful Explanation Professor! :) I am glad you are back.

[engladst]

Who rates the raters? - is a question one could ask...

[Tnat1on]

@engladst The accuracy of their ratings.

[Thewally1000]

Excellent explanation,.

[adidas9lwt]

bravo. keep these videos coming!

[SuperDee1978]

Very good explanation.  One of my favorite things to watch online.

[delatroy]

Theory is a great thing, practice, entirely another.

[digitalraver81]

yup yup....and then a D driver go to Filch and tell him hey....how about I pay under the table 30 dollars to give me an AAA rating. This is a good deal for the D driver b/c he has to pay 50 bucks anyway. Good for Fitch b/c he got 25 bucks. So now we have a D driver driving john car when john thought he is an AAA driver. This is the analogy of the people who go burn on the mortgage crisis.....buying stuff that was thought AAA but in fack it was junk bond!!!

[hawkeve]

But seriously... great explanation 8)

[hawkeve]

Independent? Didn't they just bribe him with a dinner ? Lol

[mjbarrowful]

Countries pay the rating agencies? That seems like it would create a conflict of interest. Maybe I'm just confused

[h1rschp]

@mjbarrowful You are not confused. The entire ratings system is based on a conflict of interest.

[kgtrains]

great explanation!! So happy your back, one of my favorate youtube channels!!!!

[foyez5]

That was an excellent explanation dude!

[jbnu11]

way to go S&P...

Seriously though, the credit downgrade is the tip of the iceberg and probably isn't the cause today's -600pt drop in the DJ. People are worried about the debt in Europe turning into a domino effect, China has been slowing down, and massive drops in commodities like oil are indicative of a slowing global economy. Hopefully we're not in a double-dip recession, but it may have already started.

[aneis5211993]

first :P