Jim Devine wrote:
To be fair to the ratings agencies, they don't get money directly out
of setting ratings (I think they're not-for-profit). They aren't
conpeople as much as they don't want to rock the boat.
On 8/16/07, Michael Perelman <[EMAIL PROTECTED]> wrote:
The first quote is ridiculous. The agencies didn't just fail to warn
investors, they conned them.
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As the piece posted by Michael yesterday noted, the agencies rate the
mortgage-backed securities packaged by Wall Street underwriters and sold to
investors, and receive rich fees for doing so - usually twice as much as
their take for rating plain-vanilla corporate bonds, which are less
complicated. The report described how they work in "collaboration, behind
the scenes, with the underwriters...making sure (the MBS) gets high-enough
ratings to be marketable". ("How Rating Firms' Calls Fueled Subprime Mess",
Wall Street Journal, August 15, 2007)
