Daily Archives: March 15, 2008

Bad Service is Good for Business

Great Article on Naked Capitalism: “Character and Capitalism”  Anyone who has dealt with a phone company, cable company or any call center will understand. It’s worth a read.  Customer Service  


Default Risk: Single A-rated Muni versus AAA-rated Corporate Bond

The details of rating Municipal and Corporate debt are necessarily different; municipalities are judged by tax revenues and taxable base while a corporation it’s sales revenue and assets/liability ratios.  The ratings controversy arrives from the simple likelihood of any eventual default.  Moody’s own historical analysis shows that single A rated municipalities are less likely to default then AAA corporates.
The following chart illustrates the discrepancy: 

Moody’s 10 years of default

Investment grade includes AAA, AA, A and Baa rated.