Originally Posted by dteowner
By "back testing", do you mean putting historical trials into the model and see if the prediction matches the historical result? If that's the case, wouldn't it be hard to do historical checking on a mechanism that had no real history? The bundling scheme was a new approach at the time.
Big difference between a poor short-view business plan and illegal, though.
Impartial does not equal infallible. Besides, wouldn't the whole thing be covered by that generic "investments can lose value" disclaimer that's on everything? Caveat emptor, and all that?
I guess the real question is, is the financial industry itself pissed off at these guys for what they did (as opposed to, for the end result of losing a ton of money in the crash), or does the industry see them as scapegoats? Seems to me like the latter, but I'm no investment banker. If people in the industry see the ratings guys as crooks, I'd certainly have to correct how I'm reading the tea leaves from the outside.