Let’s be clear about the true origin of the financial “snake-oil”.

Sir Robert Shiller in “A failure to control the animal spirits” March 9 completely ignores that the “snake oil” the financial world bought was produced almost exclusively by the financial regulators, those who held that banks could leverage their equity 62 to 1 when they gave credit to corporations determined to be AAA or AA- by their official default risk surveyors the credit rating agencies.

Shiller writes that “It was part of a story that all investments in securitized mortgages were safe because those smart people were buying them”. He is wrong! It was part of the story that those securitized mortgages were safe because they “are AAA and if the credit rating agencies are good enough for Basel, they’re good enough for you”