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Because, to quote from The Big Short, “if we don’t give them the rating they want they’ll just walk down the street and go to [the other ratings agency].”

Does that make any sense? No.



In the case of “The Big Short” it did make sense, because the ratings were required by the government, not the purchasers (who often/usually disregarded the ratings for the purpose of valuation), and the sellers paid for the ratings.




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