by Kris Sayce on October 22, 2008
At the end of this year we shall run a vote for the most over-used phrase or word of 2008. Anything with “credit” in the title is probably odds on to be the favourite. Especially when accompanied by “crunch,” “crisis,” “meltdown,” or “Freeze.”
There does appear to be a late challenger though. It is “unintended consequences.” It seems as though the hapless politicians and bureaucrats are incapable of doing anything at the moment that doesn’t involve an “unintended consequence.”
The trouble is that most of these unintended consequences are actually “obvious consequences.”
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by Kris Sayce on September 4, 2008
How so? We don’t have the space to go into it in any great detail, so here’s the thirty second version. A Triple A credit rating is normally reserved for those companies or governments that are deemed by the rating agency to be so financially reliable – beyond almost any doubt – that they will have no problem in repaying their debts. For example the Australian government has a AAA credit rating.
The less the expectation is that a company or government can repay its debt the lower the credit rating, eg. AA, B, B-, C, etc… Bonds with a rating of less than B are typically termed as being “Junk Bonds.”
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