k45

Three Views of Three Big Failures

"I did not do my homework this past July and August when I decided to purchase AIG then prime-rated bonds. I bought them based on their comparative high yields to maturity, never thinking for a moment the issuer might be in deep distress."

We learned the lesson that the market is a better judge of character than the rating agencies who are paid (by the bond issuer) to provide a high rating.

The rating agencies are either sloppy or dishonest. In either case, they belong on the scrap heap with AIG and other dishonest companies. We have learned that their ratings are worthless.