valuemanager03

Rating Agencies Target Guarantors to Deflect Subprime Blame

With all due respect to Tom... but his article is just blame shifting from the insurance companies TO the ratings agencies. The insurers took crazy risks at very low premiums... and thus ruined their reputations themselves (while all the while being rated AAA). Those poor underwriting decisions are NOT the rating agencies faults. Even while being rated AAA early this year, the market (investors and clients) already treated them as insolvent. Look at the yields they had to offer to raise capital. Look at municipalities reinsuring their already wrapped bonds. And Moodys or S&P keeping a AAA now wouldn't change that.