No, fact. A AAA rating has always been understood to mean "money safe."
Yes, Crash, as ever you know more than those of us in the industry
I wrote god knows how many derivative notes - do you think that Moody's inspected each and every one? Was able to value it to work out its risk profile despite the fact that we made our money because at the time we were the only ones who could value it? And individually give each separate note a credit rating. For free?
Just what the fuck do you think you are doing trying to look like you have a clue?
Every note I wrote was triple A rated because my institution was triple A rated. End of.
As the Federal Crisis Inquiry Commission found:
Yes, and they were woefully ignorant to write that. How stupid do you have to be to buy a note that explicitly explains its behaviour in the event of default, and then blame the ratings agency when it defaults
The ones to blame are those that bought the notes in full knowledge of their default potential, but were rewarded only on upside performance. As long as those notes were paying enormous returns, who the hell cared about risk of default, right? They were told they could only buy AAA and so they bought AAA. And those enormous returns - they weren't at all a FUCKING HUGE CLUE AS TO THE UNDERLYING RISK PROFILE.
No, in fact they're guilty of not actually having done what you claim they do - explicitly disclosed the nature of their default mechanism.
That mechanism is there to see on the note. That is what makes the default. A ratings agency can rate whetever the hell it likes, or whatever it is paid to rate. When the ratings agency is asked to rate a bunch of securities, you have to be very clear what is being rated.
In many cases ratings agencies misrepresented or even outright lied about the underlying default mechanisms and rates involved in these toxic securities.
If you are holding a note, here's a clue. Read the fucking thing. And if it refers to underlying securities, go and see how they are performing. And if you ask a credit rating agency what they think of the note, make sure you understand the note before interpreting their answer. And if you don't understand a note, here's another clue - don't buy the fucking thing.