Interesting chart showing current rating on CDO tranches rated AAA from 2005-07

alan_IHB

alan_IHB

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Distribution of ratings on AAA CDO tranches circa 2005-07





Found this interesting chart. Less than 1 in 4 tranches still rated AAA and some now down to D.
 
<a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=aa2D1eC6Ed6s">Bloomberg repots SEC investigating ratings agencies</a>



Just to go along with the figure, the ratings agencies may have comitted some serious misconduct in granting all these AAA ratings to MBS.
 
Why did anybody believe all this stuff?



I never read the info I'm sent every quarter on the shares I haven't sold

yet. I don't necessarily sell the shares, but I don't believe what those reports

say either. The people who massage those reports would get fired if they

put in any really bad but true stuff. The best you can hope for is no outright

lies, just Clintonesque prevarications.



So why did anybody believe that all the tranches labeled AAA (or anything else

either) were really AAA?



Having seen the uncertainly of repayment up close and certain as to individual

loans, why would I believe some ratings agency who didn't go eyeball to eyeball

with the borrowers?
 
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