School board members received this happy news in their inbox recently:
Mr. Hinton wanted to let you know that he just found out that once more, we were able to get an A+ rating from Standard and Poors for our bond rating. This is GREAT news!
Debbie Sullivan CPS
Superintendent’s Office
Peoria Public Schools
According to Wikipedia, Standard and Poor’s A+ rating is considered “upper medium grade” and described as a “safe investment, unless unforeseen events should occur in the economy at large or in that particular field of business.”
And now we know why we have such problems in the financial industry.
yeah, if i recall, all those sub-prime mortgages were securitized and bundled with other products, given inflated grades (eg, many of the now defunct mortgage backed securities had AAA ratings) and sold. so i have little confidence in the rating system.
“Investors bought bundles of mortgages which were so complex that nobody could put a price on them. Investors relied on ratings agencies to AAA-rate them. But the investment banks paid the ratings agencies that gave the highest rating.”
http://en.wikipedia.org/wiki/Subprime_mortgage_crisis#Inaccurate_credit_ratings
http://www.bloggingstocks.com/2007/12/10/sizing-subprime-securitizations-first-financial-crisis/
after watching the dude from S&P and comments on AIG I wonder about them? After all they are a business out to make a profit also and give the illusion of being holier than thou!!
Anal-lyst get their info how?? { I know ,do you?}
This proves someone does not know what they are talking about!!
An A+ from S and P is not unlike an A+ from District 150… certainly not the best one can do and certainly not what it appears.
An A+ in both these cases is really about average… a C.