Good eye/mind catches logical fallacy in WSJ Analysis

Jean Whit notes that the authors of this piece about Wall Street Journal number crunching about sovereign debt default and bond ratings, WSJ Analysis: Rating Firms Not Effective at Predicting Government Defaults, got their analysis backwards. A classic case of sampling on the dependent variable or percentaging in the wrong direction: how many of the defaults had a given rating rather than how many with a given rating end up defaulting. See Jean’s comment at bottom of post.