Thursday, August 28, 2014

Risk / Reward Ratio

Contrary to what is presently believed today, interest rates and debt ratings are meant to serve as risk premium pricing mechanism / tool.  To believe otherwise is pure folly (in the long term).

"The DOJ's lawsuit against S&P as a targeted payback for its downgrading the U.S. credit rating in 2011 is entirely consistent with the Obama DOJ's pattern of politically motivated actions.  The lawsuit against S&P was also an effective means to silence and stop Moody's and Fitch from downgrading U.S. government debt - and thereby save Barack Obama from the historical ignominy of the president who lost America's triple-A rating and set the stage for the next financial crisis."  -

comment from the WSJ letters to the editor