Comments on: Debt-rating agencies

By: chris r

chris r — Tue, 18 Mar 2008 17:17:27 +0000

There are info sources for certain classes of restaurants, for example Zagat’s.

By: slaniel

slaniel — Tue, 18 Mar 2008 11:40:12 +0000

Events in financial markets are not normally distributed.

They still have a standard deviation. :-) Really what I meant was the beta coefficient as a measure of volatility, but beta still involves the standard deviation.

By: Dylan Thurston

Dylan Thurston — Tue, 18 Mar 2008 10:31:54 +0000

I really want to be looking at the standard deviation of interest rates over a sufficiently long period...

Events in financial markets are not normally distributed.

By: Adam Rosi-Kessel

Adam Rosi-Kessel — Tue, 18 Mar 2008 02:04:28 +0000

There's no Standard & Poor's for restuarants [sic]. So why is there an S&P for securities?

I think it's just complexity and information costs. It's pretty easy to size up a restaurant for taste and report your impressions. It's also not that difficult for health inspectors to come in and test for rat excrement. Evaluating a complex security may require a team of expert (each with their respective expertise) to spend several weeks or months digging into the books, building models, etc.. There's more to your question than just this one issue, I realize, but I do think complexity and high information costs are the core of the answer.