car_guy

Big Three Endure Public Flogging - Government Finally Gets it Right

This brings up another good point. How can the ratings agencies constantly downgrade the US 3 manufacturers driving up their costs & making them uncompetitive (you notice only Toyota is offering 0% financing, with GM's credit rating how could they afford it) while rating derivatives they don't even understand AAA. Isn't a lack of understanding the very definition of risk.

This sounds like market manipulation 101. Put high ratings on the products your customers, the investment banks, want to sell and downgrade everything else. After being so incredibly wrong, why does anybody care what Moodys/S&P/etc rate anything at?


On Dec 07 02:47 PM James Wilson wrote:

> I can see what Buffet means now. Each Derivative split into hundreds
> of small pieces with the total profit broken into even more Derivatives
> then sold in a package at full value as AAA paper.
>
> The same thing Enron was doing by dividing the risk then packaging
> the longterm profits as a short term gain.