Quote:
Originally Posted by aklim
That's what I am saying. They were highly respected because most of their ratings were pretty much right on. Now, unless you think they are using a different equation for certain securities like these, which is a whole different story then what is it that made these C-rated securities A+ ratable? Could it be that the govt guarantee of it, in view of the govt strength was a factor in changing the C-rated securities to A+ rated? IOW, "Oh, it's backed by the US govt so it must be A+ since the govt is strong."?
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Govt backing most likely played a role in at least some of the improved ratings, but in general it was the backing of someone else, be it the govt or some firm on Wall Street that had backing from someone else and so on, via those credit default swaps.
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