If a Credit Rating Falls in the Forest…

The latest “big” development in Euro-area debt crises came yesterday as Moody downgraded France’s credit rating from Aaa to Aa1. Obviously, this was a massive event for the Euro, and for global markets.

Just kidding.

It was a pretty boring day, leading us to wonder what use these ratings agencies are in the first place.  Remember August of last year, when S&P cut the US credit rating? Or how about when S&P stripped France of its AAA rating in January, along with issuing downgraded credit ratings for eight other European countries: single-notch downgrades for Malta, Slovakia, Slovenia, and Austria; two notches each for Italy, Spain, Cyprus and Portugal? Markets reacted then pretty much like they have today.

Nothing. Nada. Zilch. Zippo.

It’s starting to make us wonder… other than the fact that certain entities are only allowed to invest in “investment grade” bonds, why do we even bother with the ratings agencies? They are, after all, the ones who stamped their AAA seal of approval on those mortgage-backed securities… right up until they imploded the global financial system.

If you’re counting on Moody, Fitch, or S&P to warn you of impending financial problems… well, let’s just say you might do just as well looking for warning signs in next years’ history books.

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Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.

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