The situation is now apparently different from a few weeks ago, says Moody's. What exactly is different? Moody's says "the market's perception." Not that such a thing isn't material, but how exactly can we have a legitimate ratings complex where market perception is a major input? Allow us to illustrate: this means that when everyone is irrationally exuberant, things will tend to get strong ratings. When everyone is panicking, things will tend to get bad ratings.

Our read is that Moody's is shirking their own responsibility by claiming that, in essence, there are no fundamentals. We wonder then, what exactly is the objective value that ratings agencies add?

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