Quote:
Originally Posted by Bobblehead
I think the ratings agencies have done a horrible job over the past decade, and acted like a rubber stamp on many of these instruments that crashed. They deserve a solid chunk of the culpability, but seem to be escaping unscathed! How did all these highly rated assets suddenly crash?
Yeah, the banks are themselves the root cause, no question. But wouldn't it have been good if the agencies that were rating these instruments actually demanded to know what was in them and rated them accordingly?
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Good points!
It is also worth mentioning that Standard & Poors failed to predict the bankruptcy of Iceland in 2008 and the country had a very high rating until it suddenly collapsed. One of the few times where you question one of Warren Buffett's investments as he took an 18.6% stake in long-established rating agency Moodys. Rating agencies were investigated by the SEC for what that is worth as it is one boys club checking over anothers work....I am a bit of a cynic on this topic!