[slavik81]

The real truth the crisis underscored is that the ratings agencies are useless at actually scrutinizing the risks on the things they rate. The fact that they remain a trusted arbitrator for certain investor classes is concerning, because it implies that as useless as they are, they're still more competent than institutional investors. Personally, I'm glad I don't have to trust my retirement savings to a pension fund.

[icebraining]

The fact that they remain a trusted arbitrator for certain investor classes is concerning, because it implies that as useless as they are, they're still more competent than institutional investors.

There's another interpretation: by "trusting" these rating agencies, institutional investors can shift the blame when the investments go wrong.

[desdiv]

>The real truth the crisis underscored is that the ratings agencies are useless at actually scrutinizing the risks on the things they rate.

Enron was rated investment grade by the rating agencies four days before its bankruptcy. Fool me once, shame on you; fool me twice...