On Thu, Apr 29, 2010 at 8:58 AM, Ed Leafe <[email protected]> wrote: > On Apr 29, 2010, at 9:48 AM, Stephen Russell wrote: > >> The people who were purchasing these bonds did their research or did >> they just get the insurance on top of the bond? Did they accept the >> FALSE rating of the bond and not do their homework? > > This is ridiculous. The whole purpose of rating agencies is to enable > investors to do their homework. If you considered buying a bond, and that > bond was AAA rated, you should expect extremely little risk, along with a > lower rate of return. bonds with lower ratings had higher risk and a > concomitant higher rate. > > No one outside of the bond issuers knew that the rating was false at > the time, and it is disingenuous to take a superior tone towards people who > accepted the rating agencies' judgments. It's as if a food company falsely > labeled a box of poison as containing nothing but wholesome ingredients: > you'd probably sneer at the "losers" who read the ingredients and made their > purchase based on that as "not doing their homework". ------------------------
Goldman Sachs & Co. sold mortgage investments without telling the buyers that the securities were crafted with input from a client who was betting on them to fail. That is the fraud. I looked at a few of the articles but nobody sites the rating the bond was given. I agree that what they did was wrong in the setup of the bond and if they could pressure a rating that did not fit well let them see some jail time. It is amazing how these same bonds are still available today a a reduced rate. :) 8 cents on the dollar in many cases. So you can still pick up some winners but you have to look through the prospectus I think is the term even in bond disclosure to see what the true risks are. Ed that act of reading the fine print has always been there. I know some brokers who will recommend stocks and be well compensated for that knowledge. Do I accept their belief in potential as AAA ? If they are wrong all that is said is better luck next time, and I think that ..... is going to do better and we should get in. -- Stephen Russell Sr. Production Systems Programmer CIMSgts 901.246-0159 cell _______________________________________________ Post Messages to: [email protected] Subscription Maintenance: http://leafe.com/mailman/listinfo/profox OT-free version of this list: http://leafe.com/mailman/listinfo/profoxtech Searchable Archive: http://leafe.com/archives/search/profox This message: http://leafe.com/archives/byMID/profox/[email protected] ** All postings, unless explicitly stated otherwise, are the opinions of the author, and do not constitute legal or medical advice. This statement is added to the messages for those lawyers who are too stupid to see the obvious.
