Warning About Money Questions

Mahalo Answers is a great place to start your research into Money questions, but it's not the final answer.

Mahalo Answers is not a substitute for informed professional advice. If you desire or require professional advice, please consult a qualified provider who is licensed in your state or country. You should always seek independent professional advice before acting on any opinion, advice, or information available on Mahalo Answers.

Next Question

Answered Question

davepamn

M$1.00 Funded By Mahalo ? | May 04, 2009 02:32 PM

Was Moody justified in the triple AAA rating for billions in Mortgage securities, at the time?

WSJ
Buffet calls the triple AAA rating a mistake, but says Moody could not have downgraded the securities at the time. The securities lost 20 percent in value.

Do you agree with Buffets accessment of Moody's action?

Should Moody have gone before a government committee and expressed concern that the real estate bubble was increasing risk in the mortgage securities market? Did CDS insurance protection allow Moody to give a Triple AAA rating and is Buffet placating to the shareholders sympathy, after the fact?

Interesting Question? Yes (0) No (0)

In Money |
|
Report |
Share

RSS

Best Answer Chosen by Asker

dcanswerer

May 04, 2009 03:08 PM

I don't think Moody's (or anybody else) could have conceivably graded the MBS as AAA rated if they had done any significant investigations on the securities.

AAA is supposed to mean that a security is essentially as good as cash. It would be inconceivable for the security to lose value. But these derivatives were based on people getting loans who never should have gotten loans. Moody's just assumed that because they were packaged loans that the risk would even out to zero?

Ratings agencies were just as complicit in the economic crash as the mortgage companies and irresponsible borrowers. They should have done their due diligence regarding the securities.

Asker's Rating:

• If you need a computer to determine the value of security because math equations should you avoid the security? Invest in securities you understand and know how to value is the suggestion.

Helpful Answer?

(0)

(0) Tip dcanswerer for this answer

Permalink | Report

Answer this Question

Ask a Question

Top of Page

Buy Mahalo Dollars with Credit Card or PayPal

Top Members

This Week All Time

buddawiggi
2nd Degree Black Belt
26935 Points
M$783.09 Earned
kty2777
Purple Belt with a Brown Tip
5400 Points
M$199.92 Earned
opher
Purple Belt
4132 Points
M$185.92 Earned

See All

Most Popular Tags

mahalo(1585)

twitter(944)

iphone(461)

music(458)

google(352)

food(313)

internet(303)

online(292)

beer(278)

money(262)

movies(254)

facebook(253)

apple(250)

aotd(235)

answers(221)

health(217)

video(202)

dog(202)

free(201)

windows(196)

See All

Welcome New Members

lorakolodny, November 25, 2009 11:21 PM
annafrere, November 25, 2009 10:46 PM
ghanafatherhood..., November 25, 2009 10:23 PM
raj_mehta, November 25, 2009 10:18 PM
amitshafrir, November 25, 2009 10:16 PM

Mahalo Dollars are the currency of Mahalo Answers.

Each Mahalo Dollar costs $1.

Once you earn more than 40 Mahalo Dollars, you can request to be paid via PayPal. Each Mahalo Dollar is currently worth $0.75 when paid out via PayPal. Learn More