as an aside, the author of above was regulator during S&L crisis that Keating sent out a memo to "kill black". Black does slightly muddle the "liar loan" theme .... w/o the triple-A ratings, they still had limited market ... and we were asked to further counter "liar loans" by improving the integrity of the supporting documents. It wasn't until they found they could pay for triple-A rating (when both the sellers and the rating agencies knew they weren't worth triple-A) ... that there was significant change. Triple-A trumps documents and they could start doing no-documentation "liar loans". Triple-A ratings also open the market to the large operations restricted to only dealing in "safe" investments ... and possibly the single largest factor in there being over $27T done between 2001 & 2008.
By William K. Black Quito: May 23, 2015 Few people’s efforts at myth-making have been as devastatingly refuted as Peter Wallison. But fables that are designed to make the banksters look less criminal are always welcome by the banksters. Any honest disc
Note that if buying triple-A ratings wasn't enough, the also start doing securitized mortgages designed to fail, pay for triple-A rating and sell to their customers. Then they would take out CDS gambling bets that they would fail (creating enormous demand for dodgy loans).
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