How credit agencies work

On Aug. 5, America's credit rating was cut from AAA to a AA+ by the ratings agency Standard & Poor's. The following Monday, the Dow Jones Industrials Average fell more than five percent. That's got people wondering exactly what a ratings agency is, and why it's so powerful. #MarketplaceAPM #EconomicExplainers
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[@KUCaldog187]

Cant say enough how much i enjoy your videos!

[@kgtrains]

great explanation!! So happy your back, one of my favorate youtube channels!!!!

[@bassemhaikal]

BRILLIANT !! so happy u r back to Marketplace

[@ciboperlamente]

your videos about the economy are really the best

[@special-a6536]

Wonderful Explanation Professor! :) I am glad you are back.

[@md991free]

During the boom years, the rating agencies were in bed with the Wall Street and the very securities they were supposed to rate. Therefore, they failed miserably to properly rate them, resulting in the financial crisis, which caused many investors to lose their shirts.

[@foyez5]

That was an excellent explanation dude!

[@wallysk]

Terrific channel ! thank you so much

[@payfede19]

Great video. Great explanation. Could you explain briefly how these credit rating agencies do in order to rate? what do they look at in order to measure how high or low is the risk is for the investors investing on those shares/bonds, etc.. Thanks!!

[@johnblomberg389]

First and foremost in this example, the more/better beer you give Filch the better grade you would receive.

[@delivermethatcomedy]

Do the investment companies or banks go to the countries or the agencies for the ratings directly? How does the communication process work?

[@CreditReportAgencies]

Thanks Good Video

[@clemb1309]

Great explanation!

[@CarpeDiemTomorrow]

Great example

[@AbhishekSonavane]

Excellent!

[@houdapurple]

i loooooooooooove these videos !

[@davidalen9279]

excellent.

[@26PRO26]

very informative!

[@chrissis111]

I love these videos. Can you teaching videos on trading stocks and options? The forex too?

[@h1rschp]

@deadbirdflyinghome Can you be specific about what is wrong with the description? I don't disagree that the ratings agencies gave toxic securities inappropriately positive ratings, in fact I said exactly that towards the end. Curious to know what my error is here.
thanks

[@deadbirdflyinghome]

@h1rschp Nothing of what you said I find wrong; In fact, I appreciate the explanation. Easy to relate to and clearly encapsulates the fundamental concepts. When I said wrong in practice I mean the very essence of the free market has been gutted and left out to dry. The titans in the market are bending all the rules for profit. For example free market dictates, you lose, you tank. But that never happened to the titans; They got bailed out. "Free" Market has died. the Rigged Market era has begun.

[@RayAdamsCanada]

Lovely!

[@h1rschp]

@mjbarrowful You are not confused. The entire ratings system is based on a conflict of interest.

[@delatroy]

Theory is a great thing, practice, entirely another.

[@Tnat1on]

@engladst The accuracy of their ratings.

[@engladst]

Who rates the raters? - is a question one could ask...

[@nafism6969]

but...if ratings agencies get paid by the one getting rated, doesnt that pose a conflict of interest? :s

[@freaker126]

soooo..u can't really trust those rating agencies? :p

[@Oneworld87]

So they were bribed by banks

[@Ru5k1]

perhaps we should all stop drinking

[@oussamaoussama6364]

isn't it more logical if banks paid the rating agencies to rate the borrowers? Not borrowers paying the rating agencies to rate them, you have a conflict of interest here.

[@olivia-ph2qn]

Why would the banks (the lenders) pay the rating agencies to rate the borrowers? The borrowers are the ones that need to convince the lenders to extend a loan to them, makes more sense for them to pay the rating agencies instead.

[@icutad2]

June's a woman. that's why she's more risky than terry.

[@ΧρυσοβαλάντηςΠετμεζάς]

Not the best explain