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HOME :: RESEARCH :: DEBT :: NEWS:: JUL 2007

Subprime meltdown sparks blame game


A turn for the worse this week in the subprime home loan meltdown has pundits and investors playing the blame game.

This week lots of fingers were pointed at the rating agencies. Many investors castigated the credit assessment firms, which made lots of money reviewing and grading bonds tied to these risky home loans, for being late with warnings on these securities.

Two weeks before, Wall Street firms were the culprits — for buying these risky securities and then making them into multitiered credit cakes with a punch and selling them to funds and investors. And earlier in the year, it was greedy home loan brokers and lenders, and naive or desperate consumers looking to buy a home with risky loans who were the instigators of the subprime crisis.

read entire article on The Economic Times

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