So if for any random reason the credit spread of of entity increases market participants believe that the credit of that entity has been degraded so people lend less to that entity which in turn has a more expensive cost of capital which make it less able to receive credit. Then Moody's, Standard and Poor and Fitch altogether degrade the debt of that entity, which reinforces the belief of Market participants and widens the credit spread. In the end the entity collapses because it didn't receive credit. So Market was right, it correctly foresaw the collapse of the entity.
All of This Stays True Until
the Poor Becomes Richer Relatively to the Rich.
My Political Orientation According to Nolan Chart Survey!
As Liberal as John Maynard Keynes!
Extreme Economic Conditions Call for Radical Solutions.
The Provocative & Controversial Innovation
Since John Maynard Keynes and Friedrich August von Hayek.
It is of the Uttermost Importance That, When the Crash Comes, Which It Will Inevitably Do, we Restore as Fast as Possible the Economy by Implementing our Plausible Alternative Solution as to Minimalize the Economic Sufferings of the People. To That Order I am Building Redundant Social Networks. Please Grow the Networks!
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