Credit ratings agencies unmasked?

Just when you thought the credit rating agencies could not be more demonized comes a New York Times magazine piece that wraps it all up in one lengthy article--with a focus on Moody's. And I do mean lengthy. Much of the substance was known. And there is no need to rehash the litany of reasons why the credit ratings agencies were so willing to assign AAA ratings to all those subprime-related CDOs. No need to get into default risk vs. investment risk and all that.

But the article finds a big think sort of concept: "Thus the agencies became the de facto watchdog over the mortgage industry. ... Effectively, they did the job that was expected of banks and government regulators." The issue is what to do about the agencies. And for all the controversy, no one has come up with an alternative model, except maybe pay for ratings.   

For more:
- here's the article

Related Articles:
New credit ratings schemes likely to emerge
Some radical ideas for credit rating agency reform
S&P, Moody's bid for credibility
Moody's slams investment banks on risk measures