This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Credit Ratings Now Irrelevant to Bond Markets?

NEW YORK ( Bullion Bulls Canada) -- In our fraud-ridden markets, trivialities like economic fundamentals are no longer a factor in pricing markets. Rather, instead of "fundamentals" we now have patterns of manipulation: the direction in which markets are being pushed/pulled by the Western financial crime syndicate.

In this respect, we look to the corporate media propaganda machine not for information, but rather for clues on if/when a new pattern of manipulation is about to occur in a particular market. Here we have Bloomberg tipping us off that a new paradigm of corruption is about to take hold in Western bond markets.

Previously, credit ratings mattered. Indeed, the knee-jerk reaction of lower credit ratings leading to higher interest rates on European bonds was the principal mechanism used by the Wall Street banksters in perpetrating the economic rape of Europe via its bond markets. Simultaneously, we were bombarded with propaganda that the "AAA" credit ratings of the U.S. and the UK was what set them apart from the "riskier" bond markets of Europe.

But that was then, and this is now. With the rape of Europe now a fait accompli, the bankers have customized a new crime paradigm for the bond market -- one which takes into account that the absurd, fraudulent credit ratings of the U.S. and UK are about to decline to at least slightly more plausible levels.

Does this mean that U.S./UK bond-holders should be dumping the most over-priced bonds in the history of the world? Of course not, scoffs Bloomberg; because as any good propagandist could tell you (starting today), credit ratings don't matter in the bond market.

...Bond investors needn't worry that a rating cut will hurt returns. About half the time, government bond yields move in the opposite direction suggested by new ratings, according to data compiled by Bloomberg on 314 upgrades, downgrades and outlook changes going back to 1974.

Let me explain exactly what Bloomberg is saying here, so that readers will understand the true significance of what is being asserted. If bond interest rates move in an (expected) counter-direction to ratings upgrades/downgrades, this is known as a "negative correlation." If bond interest rates moved with ratings upgrades/downgrades, this is known as a "positive correlation."

However, when interest rates are equally probable to move in either direction after a ratings change (as Bloomberg asserts) this means that interest rates have zero correlation to ratings changes -- i.e. changes in ratings are totally irrelevant to bond prices/interest rates. Thus, the claim Bloomberg is attempting to make is that for nearly 40 years, the credit ratings of the major credit rating agencies have been 100% irrelevant to bond market prices.

1 of 4

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs