You put a big chunk of your nest egg in a life insurance policy with an A+ company. You invest another sizable amount in a portfolio of high-rated corporate bonds and tax-free municipal bonds. Then, feeling safe and secure with most of your funds, you take a flyer on a few stocks that a dozen separate research analysts have unanimously rated as a buy or at least a hold. You assume you've made informed decisions based on the best research the world has to offer.

The reality: Even in the absence of bubbles, busts, recession, or depression, you could suffer wipeout losses.

Hard to believe this could actually happen? Actually, it already has happened; and I want to help you make certain you don't get caught in Wall Street deceptions like these in the future. So in this chapter, I tell you what they are, how they emerged, and how to avoid them.

Their primary source: legalized payola and massive conflicts of interest.

The primary result: distorted research and inflated ratings on hundreds of thousands of companies, bonds, stocks, and investments of all kinds.

The threat to you: Far bigger losses in your investments than you would have anticipated otherwise.

Indeed, Wall Street's inflated ratings are, themselves, a kind of bubble, which, when fully exposed, could suffer a great bust of its own—deepening the price decline, hurting the chances of each company's survival, and aggravating any economic crisis.

Wall Street's ratings are the brains ...

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