Is on full display in this Portfolio expose.
You know how everybody's been touting the genius of Warren, how he warned derivatives were weapons of mass destruction, etc.?
Well, a lot of people also know that Moody's, etc., the financial ratings agencies, were a big part of the problem, by their jacked-up ratings of CDOs, etc.
Guess who owns 20 percent of Moody's?
No names, but his initials are Is on full display in Warren Buffett.
But, it's only starting to get bad, the story that's laid out in Portfolio.
Investor Steve Eisman, by the time he laughed at a Moody's investor, in the same section of the story, was already "shorting" the bonds based on the worst tranche of subprime-loan based CDOs. But, financial investment agencies were then creating new CDOs based on Eisman's shorts!
Eisman said it's the equivalent of drafting Peyton Manning in fantasy footbal, and the act of drafting him creates a second fantasy Peyton.
“It was like feeding the monster,” Eisman says of the market for subprime bonds. “We fed the monster until it blew up.”
It's a long story, nine webpages if not in single-page view. But, it will give you further understanding of just how things went wrong on Wall Street.
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