Who is really to blame for the economic downturn?  Is it the banks?  The senator not paying his taxes?  Past President Bush?  Well I think we should start looking at the Credit Rating Agencies (CRA).

Let’s first explain what are Credit Rating Agencies (CRA), and what their responsibilities are so, that you (the people) are informed.

“A credit rating agency (CRA) is a company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves. In some cases, the services of the underlying debt are also given ratings. In most cases, the issuers of securities are companies, special purpose entities, state and local governments, non-profit organizations, or national governments issuing debt-like securities (i.e., bonds) that can be traded on a secondary market. A credit rating for an issuer takes into consideration the issuer’s credit worthiness (i.e., its ability to pay back a loan), and affects the interest rate applied to the particular security being issued. (In contrast to CRAs, a company that issues credit scores for individual credit-worthiness is generally called a credit bureau or consumer credit reporting agency.)” Source: Wkipedia

Note: I could of shortened the definition, but it is necessary to have the full meaning of the term.

How are the Credit Rating Agencies (CRA) Responsible?

Essentially, the Credit Rating Agencies (CRA), were in fact the ones that told these companies that they could sell these AAA bonds and packages and are now telling they can no longer sell them.  Interestingly they found that out after the the markets went down quite a bit.  Was the CRA really doing their job in the first place?  I think they are the ones to be blamed, and I feel that the American people have been robbed by these companies who obviously didn’t provide their services as intended.

After, several months they issued to some of the big bond insurance companies could no longer offer and sell their AAA (really good bonds) rated bonds.   The CRAs also downgraded most of these bond insurance companies.  Though, it was really unfair because these businesses were told by the CRAs that they could in fact sell them just weeks prior.  The CRAs clearly made a huge mistake, didn’t do their homework, and is now taking away from the American people.

Lawsuit? Yes I think so,  I believe, the entire USA, and people around the world who were affected by these companies decisions and actions caused by these companies have the right to legal action, for inaccurate information and now they the CRA are trying to get the bond insurance companies that have been so overwhelming affected by these ratings are now treating companies poorly like they did something wrong and downgrading them.  In an effort to save themselves the CRA did wrong and is now blaming everyone else though they were in charge of what bond insurance companies were worth to an extent.

Clearly they were not doing their job, and they should be repremanded for their mistakes nobody else but CRA.