See tptacek on this thread: http://news.ycombinator.com/item?id=2768921 http://news.ycombinator.com/item?id=2768921 A lot of regulation tells big often state-b

See tptacek on this thread: http://news.ycombinator.com/item?id=2768921 http://news.ycombinator.com/item?id=2768921 A lot of regulation tells big often state-based institutional investors like retirement plans and university funds that they have to invest X% in AAA rated investments. Demand for AAA rated products creates not just financial wizardry that spawns more AAA products from riskier products, but the increasingly powerful finance industry/lobbyists pressure government officials (usually appointed representatives from the finance industry) to make this easier...if not transparent.