Ratings Agencies – Grade F

27 02 2010

Category: Finance

In my post about some of the financial jiggery-pokery that got the economy where it is I mentioned the problems involved in getting accurate valuations by the ratings agencies. This was well illustrated by the Economist recently with a table of information compiled by Donald Mackenzie of the University of Edinburgh:

With mortgage-backed securities it’s clear the ratings agencies simply got it wrong; dead wrong. They were supposed to be assessing risk, they didn’t do a particularly good job of it… Read the rest of this entry »

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Chickenomics 2 – From the Henhouse to Government Debt

1 12 2009

Category: Finance

In my post ‘Chickenomics’ I gave a farmyard illustration of the forces at work with the credit boom. In my example I started out looking to finance a new chicken coop and ended up getting so much money I was looking for a private jet. This is how that process was mirrored in the real economy… Read the rest of this entry »