3 
The Link Between Credit Derivatives and Bonds
The accounting irregularities of the Agencies first surfaced in 2003; the subprime meltdown happened four years later. It is now clear that the two events were linked.
If the Agencies, each of which spent billions of dollars a year on risk-management systems and hired thousands of people, supposedly to manage their investments, couldn't keep the accounting straight for their mortgage securities, what hope did anyone else have? The subprime meltdown was caused, at its root, by the fact that neither borrowers nor lenders fully appreciated the risks they were assuming. If the Agencies couldn't account ...
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