Ratings Inflation Is Back, Subprime Style


A decade after the triple-A failures of the subprime era, grade

inflation is back on Wall Street.

This time, Moody’s Investors Service and S&P Global Ratings Inc. are

cutting companies slack on mergers and acquisitions, an analysis of

credit-ratings data...

There can be no doubt that this development puts investors at risk. If

investors cannot depend on objective ratings then, when the next

financial crisis hits, so-called blue chips could end up destroying

wealth instead of preserving its. It is important to remember that,

unlike paper investments of all types, gold investments are not

dependent on anyone's promises...

http://www.bloomberg.com/news/articles/2016-10-25/in-m-a-ratings-soft-pedal-risks-in-biggest-ever-borrowing-binge

#closet

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