It's not a stretch to say the whole financial industry revolves around the compass point of the absolutely safe AAA rating. But the financial crisis happened because AAA ratings stopped being something that had to be earned and turned into something that could be paid for.
Interpretation
AAA ratings should signify earned trust, but they became compromised due to corruption within the financial industry.
Matt Taibbi critiques the financial industry, highlighting how the integrity of AAA ratings deteriorated over time. Instead of being based on actual financial stability and trustworthiness, these ratings became accessible through monetary means, leading to false security and ultimately contributing to the financial crisis. This quote serves as a reminder of the importance of maintaining ethical standards in finance and the dangers of prioritizing profit over integrity.
In practice
This quote could be used in a financial seminar discussing the importance of trust and integrity in ratings.
You win the modern financial-regulation game by filing the most motions, attending the most hearings, giving the most money to the most politicians and, above all, by keeping at it, day after day, year after fiscal year, until stealing is legal again.
Wall Street has turned the economy into a giant asset-stripping scheme, one whose purpose is to suck the last bits of meat from the carcass of the middle class.
'Nobody goes to jail.' This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world's wealth - and nobody went to jail.
By creating an urgent crisis that can only be solved by those fluent in a language too complex for ordinary people to understand, the Wall Street crowd has turned the vast majority of Americans into non-participants in their own political future.
All the time and effort people devote to picking the right fund, the hot hand, the great manager have, in most cases, led to no advantage.
A fiduciary standard means, basically, put the interests of the client first. No excuses. Period.
People come in. They are too gung ho. They invest too much money in things they don't know. They lose it and then they clam up and stop investing. Then they miss the actual boom. That's the nature of the market.
When somebody asserts that a stock has an earning power of so much, I am sure that the person who hears him doesn't know what he means, and there is a good chance that the man who uses it doesn't know what it means.
When I trade, I don't have an agency problem; I have my neck on the line. When a bank or banker trades, it's not his neck on the line.
The math you need for most of finance is ninth-grade algebra, and most people feel reasonably comfortable with that. But I think the financial world there has been - I don't know if it's by design, or this is how it's evolved - there are bad actors who have wanted to obfuscate because you can benefit from the lack of transparency.
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