Why was this blog created? The answer of this question is very simple - because of the need of truth. It is absolutely clear that the leading credit rating agencies does not create reliable ratings. They are politically dependent and when calculate ratings they are pressed by governments.

In fact, current credit ratings model is an instance of a big conflict of interests. Agencies are paid by the government and they make ratings for governments. So if any government decides not to use any agency, it will lose money...

At the moment, pressed by politics, the agencies issue funny results. For instance Italy has higher rating than Russia. But Italy has an enormous debt, while Russia has a tiny debt. Italy has a huge budget deficit, while Russia has a low deficit or a surplus. So it is strange Italy to be more reliable debtor, than Russia?

Very funny was situation with Greece in 2009 - months before its de facto default - it had a rating of A and higher. The Collateralized mortgage obligations that exploded in 2008 had a rating of AAA. Even Lehman Brothers had AAA just a day before bankrupting...

What does the credit rating means?

Something very simple - it means the ability to repay your loan. That is the credit rating, and nothing else. So if you are more risky, you must have lower rating. It is so simple.

But in fact this is not the reality. Political leaders press the agencies arguing that if they lower any rating they will create problems. So the agencies are pressed to keep higher ratings so it is easier for governments to borrow. This means that agencies are lying the audience in favor of governments that pay them.

Where the truth is?

It is in a simple and transparent formula, that is independent of 3rd party influence. Everyone must be able to calculate ratings by himself, an no manipulations to be possible. This blog is an attempt for this. A real credit ratings must be known and people must know the reality...

Dobri's Ratings