Why did the credit rating agencies give AAA ratings to sub-prime liar loans ?

I agree with your premise. It is unconscionable that they rated these risky investments as AAA. The repercussions will be widespread, as it was municipalities and pension funds that invested in these instruments, not just individual investors.





Such deception points out the need for reasonable regulation of the financial industry.

Why did the credit rating agencies give AAA ratings to sub-prime liar loans ?
I don't know why that would be a surprise to anyone. Accounting firms overlook fraudulent accounting practices so that they will be hired for millions of dollars to perform the required audit. Wall street firms give strong buy recommendations to most companies so that they can get M%26amp;A business, new stock issue business, and other types of business from the companies.





When the tech boom collapsed in 2000, thousands of companies went under that had buy ratings from wall street firms.





The whole system needs to be overhauled.
Reply:Yep, the dollar always trumps ethics and honesty. That's why regulation is needed.
Reply:yes, and they have also rated U S debt as AAA when in fact it is probably b-
Reply:


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