More criticism of credit rating agencies

We've noted that credit rating agencies have set themselves up for a lot of negative press. Some argue they are squarely to blame for much of the subprime/CDO mess we're in. Fortune has weighed in and makes some interesting points about the methodology most raters use. "Their models relied on historical data, and for newly popular things like 'liar loans' and 'piggyback' mortgages, there were no real historical data." So it looks like the raters were way off mark when you get a shakeout. In their defense, there haven't been that many outright defaults--so far anyway. We'll see how the subprime fiasco plays out. The ratings agencies would be wise to put together a robust PR plan now, before stuff really hits the fan.  

For more:
- here's the Fortune article