Ratings agencies failed to properly assess risk from "summary" of The Big Short by Michael Lewis
The rating agencies were supposed to assess risk. They were supposed to decide how risky bonds were. They failed spectacularly. They didn't just make mistakes. They made mistakes that almost blew up the world economy. They gave high ratings to bonds that were junk. They said the bonds were as safe as the United States government. They said the bonds were as safe as gold. They were wrong. The bonds were toxic. They were ticking time bombs. They were about to explode. The rating agencies were paid by the banks. The banks were selling the bonds. The banks wanted the bonds to look safe. The rating agencies made them look safe. They ignored the warning signs. They ignored the facts. They ignored common sense. They were too cozy with the banks. They were too greedy. They cared more about money than about honesty. They didn't do their jobs. They didn't protect investors. They didn't protect the economy. The rating agencies were sup...Similar Posts
Holmes faced legal repercussions for her actions
As the truth about Theranos began to emerge, Elizabeth Holmes found herself in the crosshairs of legal authorities. Investigati...
Immigration reform efforts faced opposition
As we pushed for changes in our immigration laws, we faced fierce opposition from those who saw any attempt at reform as a thre...
Wall Street’s blindness to the looming financial crisis
The financial crisis that hit Wall Street in 2008 seemed to come out of nowhere for many people in the financial industry. Desp...
Public anger towards the banks
The public's anger towards the banks was palpable in the wake of the financial crisis. People across the country felt a deep se...
International trade relies on stable currency values
Stable currency values play a crucial role in facilitating international trade. When currencies are volatile, businesses face u...
Derivatives can be used to hedge against risk
Derivatives can play a crucial role in managing risk. Companies face various risks in their day-to-day operations, ranging from...
Investors faced severe losses
Investors faced severe losses. The decline of stock values was relentless. Those who had bought on margin were in an especially...
Market efficiency ensures prices reflect all available information
Market efficiency is a key concept in financial markets that has significant implications for investors and the economy as a wh...
The seeds of the next financial crisis are sown during periods of euphoria
The experience of a financial euphoria is a recurring theme throughout history. It is characterized by a feeling of collective ...
Markets influenced by irrational behavior
In the financial world, the idea that markets are influenced by rational decision-making is a comforting notion. It suggests th...