"THE sharemarket fell sharply today after ratings agencies weighed in on last week's European Union summit." (That's the Australian sharemarket, by the way.)
Perhaps it's not so interesting, because the market will then go up again, the next time a recovery plan is announced, and then it will go down again the next time there's some bad news, and so on for a long time yet. What I thought I would remark upon here, is the political character of the ratings agencies. Ratings agencies are always based in some country or other. If the opinions of a ratings agency for a country or a bloc become too inconvenient, then surely that country or bloc will eventually produce a ratings agency of their own, with friendlier opinions. The Dagong Agency from China already has a mild notoriety for an early downgrade of the American credit rating. (I know nothing about Dagong's actual history or objectivity.) For all I know, the history of international finance already exhibits obvious examples of ratings agencies (or related entities) which are really sockpuppets for a political or geopolitical faction. But it will surely be a trend going forwards.
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