In these times of financial crises, currency crises, economic crises and crises of ingenuity (but not identity), Howl has realized that many speak of markets, stocks, bonds, credit ratings and long words techno-economic but no one then goes on to explain what they mean.
It 's a bit like asking someone to read something without first explain what the letters of the alphabet! If you allow
Howl at the presumption of wanting to explain to you gentlemen, what is spoken in these gloomy economic times, continue to read this post. Otherwise Howl apologize and invite you to find the next location where the stop sign, or maybe it has already stopped.
recently spoken of the enormous power that rating agencies perform . But what are these credit rating agencies? Again: What is the rating? And why are the agencies to assign?
Given that the obvious does not control anyone, Howl went to peek ...
The rating system is a risk rating of bonds .* The
the rating is expressed with a value in points, from best to worst AAA C or D, depending on the agency to which you refer. Affects the difference between the expected return and risk-free interest rate of the company concerned. Put even more simply: the better the rating assessment, and the lower the likelihood that the company on which the casting of a vote becomes insolvent.
The rating is therefore a "thermometer" to measure the strength of a listed company, namely its ability to repay debts. This particularly affects the trust that investors riporranno in these companies.
an example. Company X is publicly traded. X is rated A. If your rating is lowered to BBB, the interest rates charged by banks for their loans will be adjusted upward, because the company X is now seen as less "safe" and likely to face such charges, the X will be forced to "beat box", such as selling assets.
Conversely, if the X rating was raised to AA this would be judged by the market as a sign of structural reinforcement of the company X. Consequently the interest rates charged by banks could decrease, investment made by shareholders would be evaluated as more secure, and ultimately there would be an increase investment on X.
well understood that the rating is of huge importance! But on this we will return further on ... The
the rating is assigned to private agencies carrying out this task for a fee (who would have thought it? Haha) and now there are three: Standard & amp; Poor's, Moody's and Fitch Rating . These agencies launched a study on which to make judgments on society, and finally a college down the rating. The rating may be published or kept confidential, but the issuance of opinion on the agency held under constant monitoring on which the company has delivered on his vow. After this
spiegone technical considerations are: being so important to the rating agencies that determine they have virtually the power of life and death on the stock market. If agencies, for one reason or another, were wrong to express an opinion on a state or a large corporation, could bring down thousands of investors. It 's a bit what's going on in Spain: the market has invested heavily in the country's debt, but a few days ago, the rating agencies have lowered their opinion, challenged the English economy ... All with inevitable repercussions on the real economy of the subjects of King Juan Carlos ...
Howl hopes of being clear exposing a subject as complex but extremely important. Howl
justify them if it failed long, boring technical steps, but the subject of this post is to clarify and not to be picky.
* Bonds are simply called bonds or bond, or an instrument issued by companies or government agencies that pay those who purchase them to levy a capital un'interesse adding back.
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