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Jul 23 01:49 am
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All Comments by Long-Short Guy »Do S&P, Moody's Deserve the Street's Heat? [View article]
<blockquote>
<b>AAA Grades on Subprime CDOs May Give Cold Comfort: Mark Gilbert</b>
Bundling mortgages into asset-backed bonds and then agglutinating those bonds into collateralized debt obligations sliced into different flavors of risk always smacked of a sophisticated pyramid scheme. As the foundations crumble, even the apex of the CDO market is looking shaky.
Investors who thought they were boxing clever by buying only AAA rated securities are about to discover that the top grade offers scant protection when a leveraged market melts down.
And the contagion threatens to infect the leveraged-buyout market, the stock market and, ultimately, the real economy...
</blockquote>
Source:
www.bloomberg.com/apps...