Moody's. Fitch's. S&P. Tinder. All ratings services, with the former three revolving mostly around the rating of the credit quality of bonds. And then you have Morningstar and a few other analogous services, like Cramer on CNBC, which rate stocks, mutual funds, and whoever else can get fees for rating.
Why do we have these? Like...why do these things even exist when they've had such bad correlation with reality over time? Well, investors are nervous. When they mess up, lawyers sue. So lots of scaffolding is needed to keep the view stable and steady from on high.
Maybe some day humans evolve away from fear. Right around the 23rd sequel to Saw. (Not on Rotten Tomatoes, another fine ratings service.)
Related or Semi-related Video
Finance: What are the Differences in S&P...27 Views
finance a la shmoop what are the differences in S&P's, and Moody's
ratings? capital letters. really that's about it the assessment of the rating
itself is about the same. the people work at both companies all came from about [grinning men walk in front of a school]
the same schools the same semi diversified backgrounds and well they
all eat the same white bread. note the nomenclature differences here though.
Moody's does in fact look kind of moody with a big fat capital letter in the
beginning followed by small letters and slightly different notations. the S&P is
all in caps all shouting all the time. the metrics behind say a quote highly [chart shown]
speculative bond unquote down here are about the same for both companies but
the slight differences are worth noting so that when you see a rating well you
know just by the way in which it's written who wrote it.
now as for actually understanding bond ratings well that's a different story. to [document shown]
most people they might as well be hieroglyphics. [confused woman reads paper]
Up Next
What are bond ratings and what do they mean? Bond ratings are just credit ratings used on bonds. Just like a credit rating, they give the investor...
What are credit ratings and how are they interpreted? Credit ratings describe a borrower’s likelihood to pay back their debts; it’s a look at h...