Hacker News Reader

Comment by dis-sys | Hacker News Reader

Moody's? Is that the same credit rating agency which intentionally inflated credit rating for risky mortgage investment and eventually fined almost $1b[1]? It is just so funny that an agency that has already destroyed its own creditability is still running around and doing credit rating for others.

[1] http://www.abc.net.au/news/2017-01-14/moodys-agrees-settleme...

View on HN

Surprised this sentiment isn't more popular, they've proven themselves to be both dishonest and incompetent.

This could also be state propoganda, the modern US being what it is.

> Surprised this sentiment isn't more popular, they've proven themselves to be both dishonest and incompetent.

Maybe because the question of whether they are dishonest and incompetent is a less interesting ad hominem (ad companis ?) than the question of whether China can or cannot sustain its debt-fueled binge.

Whether or not it's "interesting", the trustworthiness of the source seems rather important.

> Whether or not it's "interesting", the trustworthiness of the source seems rather important.

Not really. If the question is about the popularity of a sentiment, then of course the interestingness of the sentiment is relevant.

But as with every argument, it's the quality of the argument that is important, not the arguer. The only way that the trustworthiness of the source is important is if you are unable to evaluate their argument based on other factors and were planning merely to trust them or key information they relied on based on their perceived authority which I agree would be a bad idea.

Economics is far more complicated than most other fields, and you very often don't know the real "quality of the argument" until years later. So yes, in this case prior track record does very much matter.

Yes I believe that would the one and the same.

I find it very ironic that Moody is pointing a finger at China's "debt-fueled binge" when plenty of federal debt issues are staring us right in the face here in the US.

The 8 years of Obama doubled a national debt that had taken about 230 years to accumulate. No regime in the history of America has even come close to that debt figure, and current US obligations looking forward cha-ching in ar around $200T more, far more then we can ever hope to afford.

China, being a one-party communist rule, probably has a much better chance of fixing its issues then we do due to the lack of any political infighting. It's leaders can do whatever they need to fix budget shortfalls, irregardless of having to worry about reelections.

> The 8 years of Obama doubled a national debt that had taken about 230 years to accumulate.

It's obviously bad to have out-of-control debt, but it's worth expressing national debt as % of GDP for two reasons: (a) the GDP of a nation is an engine to be used for repayment and (b) it accounts better for inflation (in periods that the nation is off the gold standard). In that context, the Obama years did not put us back up to the record (WWII).

Here are some visualizations (I assume the data is correct, I'm not affiliated with this site): http://metrocosm.com/history-of-us-taxes/

I think the only credible credit rating agency is Standard and Poor's. It'll be interesting to see how they react to this downgrade by Moody's.

S&P is arguably worse - S&P was fined $1.5B for its shameful role before GFC, it refused to downgrade problematic assets because their business revenue relies on all those junk assets being rated AAA[1].

[1] http://www.bbc.com/news/business-31115174

Should I trust what S&P is saying given their track records like this?

Oh man, thank you for bringing this to my attention. I thought they were the last credible source since they were the first to downgrade US sovereign rating in 2011 or 2012.

Reply on news.ycombinator.com