October 02, 2008

It was not magic…though it might be.

Sir John Gapper in “The banker’s fall will be fatal” October 2 writes: “In mortgages, Wall Street found a magical combination of financial leverage and lack of transparency… that allowed investment banks to make money from information-starved investors.”
Not true! John Gapper knows well it had nothing to do with magic and all to do with that credit rating agencies were empowered by the regulators as experts on risks and guides to no-risk land and hey messed it up, as had to happen sooner or later.

And so, if on magic, the real question is… what have the credit rating agencies and the regulators done to John Gapper so that he is capable of ignoring the facts?