> On Sep 2, 2011, at 10:16 AM, SA wrote:
>
>> S&P is rating subprime mortgages as AAA again, report Zeke Faux and Jody Shenn: "Standard& Poor’s is giving a higher rating to securities backed by subprime home loans, the same type of investments that led to the worst financial crisis since the Great Depression, than it assigns the U.S. government. S&P is poised to provide AAA grades to 59 percent of Springleaf Mortgage Loan Trust 2011-1, a set of bonds tied to $497 million lent to homeowners with below-average credit scores and almost no equity in their properties. New York-based S&P stripped the U.S. of its top rank on Aug. 5, saying Washington politics were making the country less creditworthy...S&P has awarded AAAs to more than $36 billion of securities in the U.S. this year that were created by bankers who continue to gather thousands of loans, bundle them into bonds of varying risk and pay ratings firms a fee to assign credit rankings.
> So are they knaves, idiots, or whores (not to malign whores, of course)?
No idea. Seems hard to understand what the hell they're thinking/doing.
But with respect to the earlier thread - I doubt investors will be buying these at risk-free interest rates just because they have a AAA.
SA