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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (12116)	3/11/2009 11:37:38 AM
From: Hawkmoon	1 Recommendation Respond to of 33421

Blackstone's CEO has it down right, IMO. The RA's overhype the credit worthiness of ABS products, while the FASB was in the process of forcing it to be marked to market: Blackstone CEO: 45% of World's Wealth Destroyed .."What's pretty clear is that, if you were looking for one culprit out of the many, many, many culprits, you have to point your finger at the rating agencies," he said. Rating companies have been the focus of intense criticism for their role in granting top "AAA" ratings for complex bonds that later plummeted in value, resulting in subsequent rating cuts, in many cases to junk status. "Once you bought into ... the Triple A paper and it turned out to be paper that was in many situations going to end up defaulting, then you really had the makings of a global problem," he said. Schwarzman said problems were then exacerbated by mark-to- market accounting rules. Those rules ask banks and other financial institutions to price assets at a value related to how they would be sold in the open market. foxbusiness.com