S&P / Moodys are rating companies for debt, not equity. The investment propo... | Hacker News

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		omh on Feb 17, 2011 \| parent \| context \| favorite \| on: It’s Not a Bubble, People; It’s a Pyramid Scheme S&P / Moodys are rating companies for debt, not equity. The investment proposition for someone lending a company money as a secured creditor is very different to someone investing equity, and I'm not sure that it directly results in investors getting any profits.

alecco on Feb 17, 2011 [–]

Yes. I'm wrong. But the ratings of the debt of corporations are highly correlated with their valuations.

Edit:

To be clear, I was talking about dumb money. Usually indexed funds and such. Enron was part of S&P 500 for years.

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