from the horses mouth: Moody's admits to peer-pressure

sniglet

No need to speculate as to why the ratings agencies were so lax in their credit ratings. Moody's flat out admits that they succumb to pressure to give good ratings to avoid going out of business (i.e. allowing a competing agency to get all the business by offering a better rating).

the largest problem for ratings agencies remains the competition created between them by banks that are searching for the most favorable ratings on deals they issue.

This pressure can mean that rating agencies are under pressure to lower their ratings standards, or possibly go out of business, Kimball added. "It's a very big problem," he said.

http://www.guardian.co.uk/feedarticle?id=7290485

jon

very funny summary of the sub-prime mortgage mess:

http://docs.google.com/TeamPresent?doci ... pauth=true

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perfectfire

jon wrote:

very funny summary of the sub-prime mortgage mess:

http://docs.google.com/TeamPresent?doci ... pauth=true

language warning

Extra hilarious for me because I have brother-in-law that works at a place called Ace Mortgage Funding.