What makes us different from our competitors
Our competitors rate investments just like us. However they are in the virtual employ of the very people designing and selling the investments that are being rated. Although we admit to a certain lack of intelligence, this seems almost a textbook definition of conflict of interest. We are dedicated to differentiating ourselves from our competitors by attempting to find a way to receive our income from the people investing rather than those building and selling the investments.
Why that difference is important
The importance of this difference boils down to the most important thing in business. The ability to trust those you do business with. It is stupid to deal with someone that you know you can’t trust. Without trust there is no business and with the current situation in the other ratings agencies, you would be a fool to trust any of them. This is why our very first rating as a company is to rate all wall street ratings agencies with a rating of “Are you kidding me?” Our lowest rating in our rating system. One step below “This shit should be criminal!”
History of what happens when that difference is ignored
I personally feel that the credit ratings agencies are not only complicit but enormously responsible for the global economic disaster of 2009. Improperly rated investments generated a worldwide demand. In fact if things were rated properly I think the following would be true:
- it would have prohibitively expensive to insure these things
- pension funds would have turned tail and run
- People in Norway and other faraway places would not have been interested
- Companies would not have positioned themselves in a way to become insolvent(although not allowing banks to lend more than they have will help this problem)
- Predatory lenders would not have been able to offload their bad loans and therefore would not have made the loans (This problem will never happen again, for proof I offer the following article)
The things being sold were horrible ideas that a child could have seen as being horrible. Many millions of people who worked their whole lives were sent screaming into poverty by these improperly rated investments. These guys did not just destroy their credibility but they severely damaged the credibility of the United States.
The government seems incapable of fixing the credit rating agencies contribution to the collapse due to first amendment rights. The goal of this site is to try and find a capitalistic way to fix the problem(I am sure there are probably reasons I don't know that this particular solution won't work). My education is severely lacking but I believe that if ratings companies changed the way they generated their income, the companies ratings would be more legitimate.