Rating Agencies Gamed by Wall Street Firms

The Big Short, by Michael Lewis (Inside the Doomsday Machine)

Published by W.W. Norton & Company, New York and London

“Spider-Man at The Venetian”, p 158

“Danny thought that the vast majority of the people in the industry were blinded by their interests and failed to see the risks they had created…The rating agencies were about as low as you could go and still be in the industry, and the people who worked for them really did not seem to know just how badly they and been gamed by big Wall Street firms.”

p. 155  “As the securities became more complex, the rating agencies became more necessary.  Everyone could evaluate a U.S. Treasury bond;  hardly anyone could understand a subprime mortgage-backed CDO (collateralized debt obligation).”

p. 100  “The more egregious the rating agencies’ mistakes, the bigger the opportunity for the Wall Street trading desks.”

“In the late summer of 2006 Eisman and his partners knew none of this.  All they knew was that Wall Street investment banks apparently employed people to do nothing but game the rating agencies’ models.”

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