The Corruption of the Rating Agencies: Is AAA Junk?

This is an interesting article discussing the opaqueness of mortgage backed CDO's and the ignorance that resulted. A history of mortgages in the U.S. is provided, along with a brief explanation of how the financial system broke down. One of the causes was the poor effort by the bond rating agencies. The main reasons for this breakdown in effective rating was the conflict of interest between the rating agencies and financial firms and the lack of competition in the rating industry. The final, most interesting point, is that not all the blame in the current financial crisis can be put on the supplier. There is a certain responsibility of the consumer to know what he or she is buying. If the deal looks too good to be true it probably is. There is always risk.