POSTED BY: SARA SINDELAR
By Allan Sloan as well as Doris Burke
NEW YORK (Fortune) -- Back dual years ago when a debt meltdown was heating up, you wrote an article called "Junk Mortgages Under a Microscope" dissecting a quite wretched mortgage-backed bonds emanate peddled by Goldman Sachs.
We wanted to uncover how these formidable bonds really worked as well as how Moody's as well as S&P, a rating agencies, aided as well as abetted a routine by giving two-thirds of an emanate backed by ultra-risky second mortgages a same safety rating they gave to U.S. Treasury securities.
We suspicion this was a cautionary tale -- but it's incited in to a abhorrence story. All a tranches of this issue, GSAMP-2006 S3, which were originally rated next AAA have defaulted. Two of a three strange AAA -rated tranches (French for "slices") have been confronting waste of about 90%, as well as even a "super senior," safer-than-mere-AAA cut is confronting waste of 25%. How could this happen? And what lessons can you take away from it?
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