| ▲ | zem a day ago | ||||||||||||||||
honestly not changing my overall feeling that credit ratings are junk science | |||||||||||||||||
| ▲ | JumpCrisscross a day ago | parent | next [-] | ||||||||||||||||
> not changing my overall feeling that credit ratings are junk science Then you have been misinformed. Rated bonds by and large fail at the rating predicted by the big three [1]. [1] https://www.ft.com/content/d97e1e86-1e90-4c5c-b972-052d43a36... | |||||||||||||||||
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| ▲ | stusmall a day ago | parent | prev | next [-] | ||||||||||||||||
You can hold both things in your mind and they aren't contradictory. It can be a bad system but it can still be suspicious if someone behaves outside the norm inside it. | |||||||||||||||||
| ▲ | torginus a day ago | parent | prev | next [-] | ||||||||||||||||
Other posts made me understand what it actually measures and why is it meaningful - it tells you if you lend this entity money at the govt bond interest rate, will this entity be able to pay back more or less eventiually? Obviously a financially rational person wouldn't lend money with worse returns it can get from the government risk-free as that would be charity, hence these are considered 'junk'. | |||||||||||||||||
| ▲ | wetwater a day ago | parent | prev [-] | ||||||||||||||||
I agree but I think both things can be true . Like in this case. | |||||||||||||||||