Rated A (but Investor Discretion Advised)
The fuse coiling up, around, over and through the financial markets continues to burn. Now it’s the Ratings Games. From Bloomberg online:
June 29 (Bloomberg) — Standard & Poor’s, Moody’s Investors Service and Fitch Ratings are masking burgeoning losses in the market for subprime mortgage bonds by failing to cut the credit ratings on about $200 billion of securities backed by home loans.
The highest default rates on home loans in a decade have reduced prices of some bonds backed by mortgages to people with poor or limited credit by more than 50 cents on the dollar and forced New York-based Bear Stearns Cos. to offer $3.2 billion to bail out a money-losing hedge fund. Almost 65 percent of the bonds in indexes that track subprime mortgage debt don’t meet the ratings criteria in place when they were sold, according to data compiled by Bloomberg.
Want to sell investment crapola? Grind it up into pieces, hide it in a financial tortilla and smother it with an exotic 5-cheese Wolfgang Puck-made queso and you’re good.
Comments
Leave a Reply
You must be logged in to post a comment.