MercoPress. South Atlantic News Agency
“Getting rid of credit rating agencies is imperative”, says top Argentine official
Argentine Economy Minister and Vice-President-elect Amado Boudou charged against credit-rating agencies and accused them of being “a source and transmission of problems,” warning that “as long as they exist, resources will continue to flow from those who have less to those who have more.” Read full article
Comments
Disclaimer & comment rulesAmado is right credit rating are a tool more likely being used to take hostage a nation issues and destroy confidence rather then being used to fuel progress.
Dec 08th, 2011 - 08:25 am - Link - Report abuse 0To an extent I agree about the credit rating agencies. They are politically motivated and do not have a great record. Who rates the ratings agencies?
Dec 08th, 2011 - 10:42 am - Link - Report abuse 0Maybe if ARG paid their bills and their credit rating was decent he wouldn't be railing against the agencies.
Dec 08th, 2011 - 12:11 pm - Link - Report abuse 0Do we have to suffer through another year of them complaining about how unfair it is that they have to pay the Paris Club debt? I guess they don't have the 9B on hand.
Spending U$100M/day supporting the peso is wiping out the reserves pretty quickly. I love how they talk about the “stability” of the peso when they are blowing a fortune propping it up. Someday soon they won't have the $ to support it then watch out below. The $5.70 exchange in Uruguay is coming to Arg sooner rather than later.
while i agree to an extend that credit ratings do prevent those the have less from getting credit, the reason they exist is because those that have a poor credit rating are less likely to beable to or even want to pay back what they borrow. So the agencies are there to provide creditors with an accurate picture of what chance they have of getting their money back if they were to lend it to that person or that country. To take away credit agentcies, you would basically be inviting more and more unsafe lending/investments to countries or people that are not able to repay the loan or simply won't repay it.
Dec 08th, 2011 - 12:14 pm - Link - Report abuse 0Now we all known it was unsafe lending and investment practices that contributed to the current economic crisis (I do not see how Amado Boudou can compare the economic crisis in europe to the one argentina had in 2001 - as they are completely different in nature and in scale). So by getting rid of these credit rating agencies we will simply see more and more unsafe lending and investment and more and more people in debt and more and more countries borrowing more than they can afford to repay and we will just end up going around in a circle of economic crisis.
So although i agree they do prevent those with less from getting loans and other forms of credit, their is a very good reason why. And to take away the tool for checking to see if a person or country is able to or capable of repaying any credit, will lead to banks and other creditors or investors making blind and unsafe lending decisions.
Off course if no credit rating agencies existed there are ways round it, but the cost of adminstering them will result in higher interest rates that a debtor would have to repay making repaying the debt even harder or the period of the debt repayment longer, which would also mean paying extra interest. So sorry but getting rid of credit rating agencies is not the answer, and i suspect that he knows this and are likely wanting to get rid of them to hide the truth.
Those dam pesky credit agency's getting in the way of CFK's Lies. I know lets get rid of them by telling the people they are the cause of the economic crisis not us & jailing any that dare tell the truth to the people of Argentina.
Dec 08th, 2011 - 01:27 pm - Link - Report abuse 0Yankeyboy.I wonder can you tell me why your country borrows so much,has such a high rate of unemployed,creates so much pollution that it is unable to agree a sensible program to reduce it but still has a positive credit rating.Is it global leadership that accomplishes it and should all countries follow it's lead.Would that lead to paradise on earth?
Dec 08th, 2011 - 01:36 pm - Link - Report abuse 0I,personally,believe that credit rating is a useful tool for the management of capital,but that,unfortunately,it doesn't help workers.High numbers of unemployment depress wage rates but doesn't lead to full employment.Likewise low credit rating leads to higher interest rates and so capital continues to have it's power over people's well-being.Whether a credit rating represents facts doesn't matter because it does indicate,real or imagined,the ability to command a higher rate(earning)on the investment of capital.
@6 Easy answer, IT PAYS ITS DEBTS.
Dec 08th, 2011 - 01:54 pm - Link - Report abuse 0I understand perfectly the role of credit agencies. I also understand why Argenina would like them to disappear. There is nothing wrong with giving information that helps establish the risk element for lenders. It is no different to personal loans. If you pay back your loan on time, you are likely to get a better interest rate on your next loan. Bad debtors are a risk and should pay an interest rate that reflects that or, in extreme cases, be denied loans.
But I do question some of the ratings given by the agencies and there is evidence of political influence behind the ratings.
Mr Boudou, the purpose of these agencies is to provide independent financial information on the fiscal stability of sovereign states and other entities. Given his last post, as minister for economic misinformation, would Boudou not agree that this type of information becomes even more important when one cannot trust anything that comes out of Argentina's boca?
Dec 08th, 2011 - 02:56 pm - Link - Report abuse 0ElaineB the friend of argentine people who speaks with forked tongue.It is a tool which is right for certain jobs and not for others.It is not accurate and if it was so useful how do you defaults in debt repayments and hoe it fails to avoid them.It's good enough for capitalist because the less wealth pay more and capitalism cannot function without credit and debt can it ?
Dec 08th, 2011 - 03:20 pm - Link - Report abuse 0Bigiron-how useful your re-statement of the criticism of sr boudou was,but perhaps you could explain why he might have made such a remark when it won't change the situation in Argentina as the remark stand.That would be very useful too
@9 - “if it was so useful how do you defaults in debt repayments” What, is that a trick question? A credit rating agencie has no control over whether a person or a Nation defaults on its repayments. Thats the fault of the debtor or nation that owes the money, who has simply run out of money and can not repay or like argentina simply refuses to repay what it borrowed.
Dec 08th, 2011 - 03:40 pm - Link - Report abuse 0And as for Credit ratings effecting levels of unemployment, well they are not the route cause, they only give the facts about peoples or an entities ability to repay based on the previous credit and repayment history.
It is the employers or entities that employ people that are at fault and to blame for their own bad credit rating, that prevents them getting the credit they need, to expand and take on more employees its the same for national debts and public sector workings that have found themselves unemployed, not because or credit ratings but because the government needs to cut back on spending in order to maintain its debt repayments efficiently and not default on those debts.
Like i said before, you lend money to people that can't repay it or won't repay it and we will end up going round in the economic crisis circle. We would never get out of the economic crises at all as everyone would be making unsafe lenind/investments and losing their money as a result, and who then has to bail out the banks when they run out of money as a result? Yep the goevernments with tax payers cash.
Getting rid of the credit rating agencies will only deepen the problem and make it worse by increase the total amount of debt outstanding. It will not do anything to solve the global economis problems at all.
“As long as they (the credit rating agencies) exist, resources will continue to flow from those who have less to those who have more.”
Dec 08th, 2011 - 08:55 pm - Link - Report abuse 0No, in general terms money flows from the more risky to the less risky.
People can still take the big risks with their money, but the biggest risks are:
putting your money in and it not being let out again,
putting your money in and seeing its value diminish by the hour, putting your money in and having it expropriated, and
. . . I could go on.
There is a case for risk-rating agencies assessing 'actuarially' commercial risk and sovereign risk,
and they operate best when they assess risk with unbiased dispassion
- that's why they should stay beyond the influences of governments.
yes, those agencies are nothing but a mafia.
Dec 09th, 2011 - 12:49 am - Link - Report abuse 0@6 Easy answer, IT PAYS ITS DEBTS.
Dec 09th, 2011 - 06:57 am - Link - Report abuse 0you're such an idiot. it has nothing to do with “paying their debts” at all.
“Yankeyboy.I wonder can you....but still has a positive credit rating”
First of all, why do you ask that to a mexican troll with a nickname that doesn't even understand what yankee means and where it's from..(hint it is for crooks). The reason why they (S&p) cut the US (bogus) tripple A rating is simple. Their main reason was WARNING: If you fail to cut more then what you're talking about what you will cut, and tpay my friends from who you borrowed (and control the money supply Federal Reserve =JP morgan chase, goldman sachs etc etc, do your homework..Federal Reserve is a private “central” bank) I will cut your rating. of course they did that because they knew they would fail (has been proven by the inside trading scandal of the US congress of both parties though nobody went to jail..what a suprise..it was considered soft corruption by CBS 6o minutes show..look it up if you care). Another reason the “rating agencies” have the US on an “okay” rating is simple. keep the people believe everything is okay until it's to late. it's very simple..it's all a scam and they work for the banks who funds them. famous one is Warren buffet, biggest stock holder of wells fargo and rating agency Moody's Corp. remember Wells fargo/wachovia (triple A)of the money laundring drug cartel scandal what was once published here on mercopruts? Anyway, he testified infront of congress and claimed “the rating agencies did fine before crises and are doing great work after the crisis. He also claimed he would sell his stake that's ”invested“ in moodys but now backed off. wonder why..
now even Germany knows the real deal with those ”rating agencies”..
from the weeklystandard..a mouthpiece/ spin machine magazine of the GOP that once a while publish something to create more anxiety.
http://www.weeklystandard.com/blogs/german-politician-euro-downgrade-american-plot_611697.html
#13 very good post and site advisory which in itself demonstrates that these ratings are negotiable rather than truly objective and support sr boudou in highlighting it's destabilising effect in the hands of politically motivated cabals
Dec 09th, 2011 - 12:10 pm - Link - Report abuse 013/14. Conspiracy theories are only believed/promoted by really dumb paranoid people. Congratulations of proving that fact guys!
Dec 09th, 2011 - 01:55 pm - Link - Report abuse 0Fido get out of the OWS camps. The USA is beautiful, vibrant, thriving and the best place in the world to make a better life for you and your family. Isn't that why you moved here? Have you ever been to Bolivia, Venezuela or Ecuador? I have and they'r pretty gross. LaPaz is the worst city in the world. That's what you get with Socialism.
Yul, comrade, capitalism works communism/socialism doesn't end of story. You're still stuck in the early 1900s somewhere, maybe you should update your history book.
@15, ugh only an imbecile will dismiss reality and spin it into a “conspiracy theory”
Dec 09th, 2011 - 05:26 pm - Link - Report abuse 0The USA is beautiful, vibrant, thriving and the best place in the world to make a better life for you and your family. Isn't that why you moved here?
The USA is beautiful, that's the land (landscapes), has nothing to do with freaks who are in charge of us tax payers here. unfortunately the tax payers are divided, illinformed and stuck in the false left vs right paradigm what the founding fathers have warned about. that history seems lost, but alive with the minority (what is logic with all the propaganda we get 24 hours today). At the begin I was certainly one of the kool aid drinkers that believed the GOP was the true capitalist until i learned my lesson that both are the same.
The people are vibrant unless their government “leaders” who suppose to “represent and work for ” the people are working against the people but for their crooked friends through “campaing contribution”. The longer the people believe that it's fine how business is being done in DC, we get what we deserve, Corportism=Fascism (Government+Corporations in bed with each other).
Only a blind fool believes that the US is a capitalist nation. A nation that bails out banks and other failed corporations to save capitalism, ex president Bush famous quote ““I have abandoned free market principles to save the free market system”...does that sound like a true capitalist to you? Someone who believes that, deserve the title ”king of morons“.
I moved here because I ”believed“ it would be different than in Europe, but oh lord, have I discovered I'm stuck with a bunch of illinformed zombies like you, ”yankeeboy“. Keep up your good work, obongo and his gang of the left and right are proud of you.
”maybe you should update your history book.”
Not maybe but you should definitely re-educate yourself, pay attention to the problems here, think for yourself and learn the constitution of the US...what you think you know.
17. You sound very bitter and I am sorry you couldn't make it here. This country is not for everyone a lot of people who move here end up moving back because they can't survive.
Dec 09th, 2011 - 06:08 pm - Link - Report abuse 0I love my country it has done very well for me and my family. I have lived in Europe and South America and saw pluses and minuses with both but I would never move back. I don't miss it and will never live outside of the USA again.
Something must be keeping you in the USA but it is terrible for your health to be angry and bitter you should probably move back to your homeland.
Yankeeboy the USA is your home.Please stay there as long as you want.
Dec 09th, 2011 - 08:32 pm - Link - Report abuse 0Fido dido-the USA is a capitalist country and the purpose of the gvt is to keep it as such,hence it has a body of law,and body of men to help it do that.You must be confusing how the law and it's agents operate.They police threats to the capitalist system and sometime the threat comes from the way capitalism operates.The basic contradiction on which capitalism is built means that there will be imbalances(the latest word to mask the reality of the nature of capital)which have to be addressed by gvt action all agreed outside of the democratic process.
Perhaps we can have a rating agency sponsored by CokeCola,that might be a refreshing idea!
Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!