TheEngineer

Appreciated, but why would an inssurer dare to operate in the field if they couldn't assess the risk through a reliable rating? Were they conned, were they stupid?

I appreciate the vested interest but I'm still missing something here. Even though the bankers may have pocketed their gains early with these devices I can't see how the insurers or the rating agencies could have benefitted from supporting MBS, CDO and the like, or in their own interest overlooked a thorough analysis of the instrument's potential failings. Where they so convincingly robust that they passed scrutiny?

So how did the designers of the risk reduction/obfuscation model (CDO's MBS and the like) get it so wrong and why are THEY not the culpable subdivision of the banking 'industry' taking the flak? And how come the rating agencies and insurers fell for it?

Seemingly every day I hear on the radio some bankster, or their agent, claiming that the City contributes huge sums to the economy. Telling us that it’s some engine of enterprise. The former point is usually met by the presenter with a silence of acceptance. Well I'm confused! I see that the City is operating a very profitable business, if that's what it is, but where does all its profit come from? Where does the money trace back to? Despite their puzzling assertion that they create 'products', to this engineer they don't actually seem to make anything at all. I'm not sure they even lubricate the gears either. More that they jam a spanner in the works and charge a healthy fee for its 'expert' removal. How, in any claim to create 'products' do they add value in any way. What are you, City?