Rating agencies are more or less out-sourced research houses - performing work that would be too costly for others to do by themselves. It an &quot;economies of scale&quot; type thing and someone would have do this research. So, to say that &quot;their ratings are not supplying any useful information&quot; is absurd. There is an extremely high correlation between default rates and ratings.<p>Admittedly some of the fees for ratings are absolutely ridiculous. When you&#x27;re doing a structured finance deal for $X billion, then 25 basis points is neither here nor there, but in $ value terms is a crap load of money. Rating agencies are cash cows, and that may be part of the problem.<p>I worked for a rating agency for a couple of years.