Compare and contrast the following two viewpoints:

1. Credit Rating Agencies do a good job of analyzing and placing credit ratings on different bond issues, as well as assigning Sr. Credit ratings to corporations that issue bonds. Most all bond investors rely on credit ratings from Standard & Poors, Moody's and Fitch as a reliable measure of the risk of issuers and specific bond issues. Why, then, is it necessary for me to understand much about credit analysis? How could it possibly be useful to me in my career?

2. Fixed Income Analysis is very important because you can't trust the credit rating agencies. Just look at how many triple-A mortgage-backed securities ended up being worth nothing after the financial crisis. It should not come as a surprise that the credit rating agencies should not be relied upon, as the issuers pay fees to these agencies to rate their bonds. Talk about a conflict of interest! Of course the agencies will rate bond issues with strong ratings: They want the business!

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