Staring at the abiss with Paul Krugman | 235 comments (235 topical, 0 editorial, 0 hidden)

caring about ratings (4.00 / 8)

is a purely anglo thing, coming from reliance on capital markets (rather than debt lending) for finance. It has led to the quest for valuing everything in monetary terms (so that it can be traded), liquidity (or lack thereof) in everything, the concept of riskless assets, and a general lack of due diligence in your lending practices. You rely on the rating rather than on your own analysis (and I've seen this from the inside - using ratings are the absolutely easiest way to be lazy inside a bank).

The lack of due diligence should not be a problem if the stupid money is punished (and not bailed out - this is where financial capitalism will break), but the reliance on monetising and valuing everything through the prism of finance brings short-termism, the "there is no society" mindset and, in the absence of a strong State, runaway greed & al.

So "anglo" is a short cut for the Reagan/Thatcher ideology, but there are roots for it where it came from.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Sat Mar 17th, 2012 at 07:17:44 PM EST
[ Parent ]

Re: caring about ratings (4.00 / 2)

using ratings are the absolutely easiest way to be lazy inside a bank

Heh. Everytime the guys from the bank come and suggest we buy this or that corporate bond (I help manage some research stipend money) and say that it has this or that rating, I give them a look and mutter something about MBS's or CDO's or the S&P downrate of the US, and then they look rather sheepish. :)

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Sat Mar 17th, 2012 at 07:23:44 PM EST
[ Parent ]

Re: caring about ratings (none / 0)

In a society where everything is market-based, everything has either a market value or no value. And no fair factoring back in the externalities the market makers have so cleverly swept under the rug.

I've always found it amusing that the Royals were generally fans of Maggie when her markets-ueber-alles approach was directly contrary to every interest and tradition of the monarchy.

by rifek on Thu Mar 22nd, 2012 at 05:31:22 PM EST
[ Parent ]

Staring at the abiss with Paul Krugman | 235 comments (235 topical, 0 editorial, 0 hidden)

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