Ratings agencies. Can't live with 'em, can't live without 'em, these pros say.
Moody's and Standard & Poor's rocked the forex market, among others, when they issued their warnings about the troubled debt-ceiling talks. But on the flip side, their comments may be pressing the two sides to reach a deal, already. And that's the way things work with rating agencies, these pros say.
Ratings agencies "missed the boat in the Asian crisis, they missed the boat in the dot coms," says Win Thin, global head of emerging markets currency strategy at Brown Brothers Harriman. Also, there is "always a risk that they overcompensate" when they are late, he told CNBC.
But they also serve a purpose, says Andrew Busch, global currency and public policy strategist for BMO Capital. "The ratings agencies play a critical role in what's going on in Europe. The EBA came out with stress tests and they're woefully inadequate," and ratings agencies can help provide a more realistic picture, he says. And he adds, "I think they're doing a good thing putting pressure on both Republicans and Democrats to come to the table and come up with an agreement."
