On Thu, Oct 23, 2008 at 1:44 PM, ken hanly <[EMAIL PROTECTED]> wrote: > > Weren't the predatory lenders also in cahoots with corrupt rating agencies > who gave the toxic paper triple A ratings? If the banks had not thought that > they were safe investments with little risk they wouldn't have bought them so > eagerly. > You don't mention the role that globalisation has played in some of these > processes..
I don't think it worked like that. The rating agencies did not evaluate individual mortgages. The originator (mortgage broker) sold the loan to an investment bank (or for loans that met the standards FNM/FRE). It is the IBs that then created a bankruptcy remote entity e.g. a CDO with these loans as its only assets and then got credit ratings for the CDO. Btw recent Congressional hearings have produced some juicy im transcripts that show how much the rating cos were complicit in all this: http://ftalphaville.ft.com/blog/2008/10/23/17359/rating-cows/ ---------------------------------snip Thursday, April 05, 2007 3:58:42 pm EDT Shah, Rahul Dilip (Structured Finance - New York): btw that deal is ridiculous Thursday, April 05, 2007 3:59:05 pm EDT Mooney, Shannon: i know right…model def does not capture half of the risk Thursday, April 05, 2007 3:59:09 pm EDT Shah, Rahul Dilip (Structured Finance - New York): we should not be rating it Thursday, April 05, 2007 3:59:17 pm EDT Mooney, Shannon: we rate every deal Thursday, April 05, 2007 3:59:30 pm EDT Mooney, Shannon: it could be structured by cows and we would rate it -raghu. -- Confucius say, dirty book rarely dusty. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
