Ooh, sub-prime time. The ABX is in index that reflects market sentiment regarding sub-prime mortgages. Sub-prime means: highly risky, low or bad credit ratings. The higher the index number, the more confidence the market is showing in the most fragile part of the credit economy.
And hopefully that makes sense as, generally speaking, prime borrowers almost never go bankrupt. All the action happens way lower on the stack, until you kiss Triple C land of ratings, and at that point, small gusts of wind can blow over the highly unstable sailboats.
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Finance: What are the Differences in S&P...27 Views
finance a la shmoop what are the differences in S&P's, and Moody's
ratings? capital letters. really that's about it the assessment of the rating
itself is about the same. the people work at both companies all came from about [grinning men walk in front of a school]
the same schools the same semi diversified backgrounds and well they
all eat the same white bread. note the nomenclature differences here though.
Moody's does in fact look kind of moody with a big fat capital letter in the
beginning followed by small letters and slightly different notations. the S&P is
all in caps all shouting all the time. the metrics behind say a quote highly [chart shown]
speculative bond unquote down here are about the same for both companies but
the slight differences are worth noting so that when you see a rating well you
know just by the way in which it's written who wrote it.
now as for actually understanding bond ratings well that's a different story. to [document shown]
most people they might as well be hieroglyphics. [confused woman reads paper]
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