Quote:
Originally Posted by Libertine
You are missing one of the driving forces behind this whole situation, though: the credit rating agencies.
Investors often didn't invest in sub-prime mortgages, but in investment grade-rated securities.
|
They invested in collaterallized debt obligations (CDO) which contained, or were made up mostly of, mortgage backed securities.
If these investors didn't do their due diligence then that's their own damn fault. We don't bail out people who buy corporate junk bonds, we shouldn't be bailing out these folks either.
If rating agencies such as Standard and Poor gave AAA ratings to subprime mortgage-backed securities, then I'm sure there's a class action lawsuit in the works.