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No, usually it's just too expensive to pull large data sets like that, so you only do it if you know the person who requested it has the capability of making sense of it.  Few do, since it requires a lot of IT as and finance skills and specialized equipment to analyze large financial data sets. The risk is that someone will look at it and come to the wrong conclusions because they don't know what the data mean.  That said, however, the better purveyors of things like mortgage backed securities, such as GMAC,  did provide useful, detailed data for public inspection accessible by website on each security.  It may have made their securities more valuable in the marketplace, but those securities went bust just like everyone else's, so it wasn't lack of underlying data that kept rating agencies in the dark -- they were selling these things as "sub" prime and "alternate" prime securities after all -- completely open about the fact that these things were backed by junk.  The AAA ratings came from the way bond tranches were organized and insured so that even if things went bad, some investors would still get paid before others (and mostly still are) so that their risk was minimal.  More underlying data about the loans could have added nothing to a rating agencies' judgment, since the rating has almost nothing to do with underlying data about individual loans.
by santiago on Tue Apr 27th, 2010 at 10:26:13 AM EST
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If you're unable to conduct an independent risk assessment because the piece of paper is too complicated, then you do not buy the piece of paper.

If you're an institutional investor then you should have that capability, unless the security in question is excessively complicated (in which case you don't want to buy it). If you're not an institutional investor, then you shouldn't be playing in the capital markets with money you can't afford to lose.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Apr 27th, 2010 at 10:32:02 AM EST
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Rating agencies like S&P don't buy anything and their ratings have almost nothing to do with checking underlying data on securities.  They just set the odds based on reported information.  Institutional investors, on the other hand, should have the capability of analyzing the data before they buy anything, and most did.  But it still didn't save them from getting burned because lack of data wasn't the problem.  It was their beliefs and models about how the world worked that were wrong.
by santiago on Tue Apr 27th, 2010 at 10:43:57 AM EST
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Institutional investors, on the other hand, should have the capability of analyzing the data before they buy anything, and most did.

Did have the capability, or did use the capability?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Apr 27th, 2010 at 01:13:56 PM EST
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You can drag a horse to water ...
by santiago on Tue Apr 27th, 2010 at 03:41:45 PM EST
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