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How credit agencies work

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Uploaded by on Aug 8, 2011

On Aug. 5, America's credit rating was cut from AAA to a AA+ by the ratings agency Standard & Poor's. The following Monday, the Dow Jones Industrials Average fell more than five percent. That's got people wondering exactly what a ratings agency is, and why it's so powerful. Senior Editor Paddy Hirsch explains.

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News & Politics

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  • 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.

  • very very very intellectual and informative. thanks!

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  • Terrific channel ! thank you so much

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

  • i loooooooooooove these videos !

  • Great explanation!

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

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

  • @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.

  • @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

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