The rating services share the blame

Joshua Rosner, managing director of an investment research firm, has some interesting observations with regards to the sub-prime problem and the rating services, Standard & Poors, Moody's and Fitch.

Perhaps his most interesting observation:

Only slightly more than a handful of American non-financial corporations get the highest AAA rating, but almost 90 percent of collateralized debt obligations that receive a rating are bestowed such a title. The willingness of Fitch, Moody’s and S.&P. to rate as investment grade many assets that are apparently not has made structured securities ratings their fastest-growing line of business. Are we to believe that these securities are as safe as those of our most honored corporations?

Rosner further implies that these ratings are given largely as the result of the rating agencies advice to the issuer as to how the debt should be structured, for rating structured securities is now the agencies' fastest growing business.