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Trash. The creators of the securities were paying the Rating agencies to assign ratings…they received more fees for the higher the rating. As a result they were directly responsible for how the securities were marketed and then sold. If the Rating Agency assigned a Bbb or -B rating then the security package never would have sold.
At the end of the day, however, the rating agencies aren’t 100% to blame. The institutional investors buying these securities are not your regular average Joe and they should have been doing their own homework. It’s like the people that were sending threats to CME last week when they came in at the back end of the silver run up and then lost 100,000s…Do your homework as a fiduciary advisor, don’t blame someone for your laziness or ignorance.
Interesting. Now that some of the big investment banks are starting to settle, I wonder how long it will take of some of this to flow down to the ratings agencies. Surely there is nothing more deserved. Quite amusing were it not so tragic – Moodys now quite happy to downgrade Italian debt, but AAA’d mortgage backed securities to the late. How, why? Surely there are suits against them?