Credit Agency Discussion



  • Here is where the Credit Agencies will begin their discussion and teaching of how to evaluate economies. Here to help me with this is the representative from the nation of Gun-Toting Animals, in case I tell you all wrong. Now, I will not be on staff for this, but I have a dear economist friend, Mr. Joseph Martin, who will be very able to help you all with this endeavour. My gentle suggestion is that you all begin your ratings as soon as possible so that we may have a standard lending rate for each sovereign soon.

    • Dr. Michael Reed


  • Can we by chance get a list of all the nations that we will be evaluating? I'm sure that we all have different opinions on how to judge activity, so if we could see such a list it would save us from many headaches.

    Also, can we go more in depth on how we will judge the criteria for establishing credit rating?



  • Patience is a virtue, Rhine.



  • Some things I remember Dr. Reed mentioning as criteria are as follows:

    • GDP
    • GDP with purchasing power parity vs. the Euro 16 Index (including the GDP of nations in the Euro 16)
    • government debt or surplus
    • trade deficit or surplus
    • and % of GDP is government spending (and not private consumption. Note: this will matter most if a nation is in debt).

    I'd like to suggest some other things that could be used as rating criteria. Political stability for one. How it is measured could be up to the rating agency but could factor in things like crime rate, how well the government transitions from election to election and other things. I'd also suggest including unemployment and growth rate.

    If anyone else has any ideas for criteria bring them forward for discussion.

    Just so we're aware, we need to make sure (for interpretation's sake) that we use a unified system of ratings:

    AAA
    AA+
    AA
    AA-
    A+
    A
    A-
    BBB+
    BBB
    BBB-
    BB+
    BB
    BB-
    B+
    B
    B-
    CCC+
    CCC
    CCC-
    CC+
    CC

    • Hawk Hitchcock, GTA's ECA representative

    (OOC: Currently we don't have a way to measure debt and there are no trackers that have growth rate so this could be difficult. We can make ways up though if we put our heads together I suppose. Also we will need to have a little tutorial for people to do exchange rate calculations. I will do that when the time comes if people would like. I don't know if it'd be preferable if it went into another thread with a way to roleplay debt as well.)



  • What Mr. Hitchcock has said is correct. Those are the criteria that Dr. Reed has come up with so far, and I think that what Mr. Hitchcock has suggested are just as important. This kind of activity is highly speculative and stability and confidence in the political process and the Law and Order of the nation is crucial to providing a stable nation in which people can invest.

    I again wish everyone to get involved with this discussion, because it is a highly complicated process.

    • Joseph Martin

    ((OOC: Since you were talking about tax burden and debt in Skype, I think we can venture to quantify debt by tax burden, though I think we could also estimate debt by economic trends as well. It's a little more work, but we can work to solve this portion.))



  • To make everything easier, everything until we set our criteria from this message will be an out of character discussion.


  • Admin

    OOC: Alan Reid arrives.


  • Admin

    Oh hello my wonderfulies! My, my, my, I?m super duper excited to here, it?s not even comprehendible! To even dream, that only one day ago I broke out of an asylum, and now I find myself plonked here, how exquisite, oh hey- that?s me! Look at me, I'm so exquisite! Hehehe. Now, now, now, let's stop being so energizicle. The criteria Mr. Hawk Hitchcock spoke of were quite fantastical and I can't think of any more I should addsicle! But what kind of cutsicle criteria will be used when we are staring-down the bees-knees private companies? If I am correcticle, I believe there?s a threesome of companies currently part of the scandalous the S&P 200?

    ~Lord Exquisite



  • Calm down Lord Exquisite, I think you may have fogged up your monocle.



  • Now, if we could readjust focus...



  • Ok so in order to express things in Euros for better comparison we will need to know how to calculate exchange rates specifically Euros per home currency.

    In order to figure out how much a nation's currency is worth you use this site:

    http://tracker.conquestofabsolution.com/

    It lists how your exchange rate in NS$.

    Suppose a nation has an exchange rate of 1 bullet = $2 NS. Then in order to calculate Euros per bullets you'd have to multiply the Ns per Bullet by Euro per NS. In this case Euro per NS is equal to .9 as seen here :

    http://z12.invisionfree.com/European_Union...?showtopic=2058

    This means that Euros per bullet = 2(.9) = 1.8 You would then multiply GDP numbers by this.

    Now let's consider nation B with an exchange rate of 2 bullet = 1 NS. We need to change this into NS per bullet. In order to do this we divide the NS by 2 meaning 1 bullet = .5 NS. Then you multiply by Euro per NS. Nation B's exchange rate= .5(.9)= .45 Euro per bullet.

    If you need further explanation please let me know.



  • "Now that we've had this discussion, let us all go forth and use our agencies to the best of our abilities. Remember that we have Europe's fate in our hands."

    (OOC: I'd like to get this done by February 10, is that possible?)


  • Admin

    ((I'm confused, all GTA explained is how we get the exchange rates... what are you expecting us to do?))



  • You use the criteria discussed in order to come up with the ratings. How you weight certain things is up to the specific agency.

    Should we come up with a standard range of ratings though? Or should each agency have a different range of letter ratings?



  • Is there a final list of Nations that will be examined by the credit agencies? Or is it up to the individual agency to do this?



  • Preliminary list for countries to be evaluated. If I have left off any nations or you think nations should be removed let me know.

    Gun-Toting Animals
    Duxburian Union
    Rhine Ruhr
    Pax Aurea
    Brecon
    GDR
    Marrakechia
    Os Corelia
    Mongolia
    Austrur
    Tierra del Helios
    Laois-Offaly
    The United Kingdom
    Kryuland
    Australian States
    Catalunya I Balears
    Northern Caesarea
    West Embria
    Aleutia
    Belarum
    Occoron
    Angleter
    Inquista
    Tamil Islands
    Mongolia in Exile



  • bump.



  • QUOTE (Gun-Toting Animals @ Jan 28 2012, 02:06 PM)

    Preliminary list for countries to be evaluated. If I have left off any nations or you think nations should be removed let me know.

    Gun-Toting Animals
    Duxburian Union
    Rhine Ruhr
    Pax Aurea
    Brecon
    GDR
    Marrakechia
    Os Corelia
    Mongolia
    Austrur
    Tierra del Helios
    Laois-Offaly
    The United Kingdom
    Kryuland
    Serbia
    Catalunya I Balears
    Northern Caesarea
    West Embria
    Aleutia
    Belarum
    Occoron
    Angleter
    Inquista
    Tamil Islands
    Mongolia in Exile

    Take out Serbia and replace it with The Australian States (Serbia will be thrown out soon).


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