The ratings agencies ought to have been just about the first ones to detect problems in the housing market, in other words. They had better information than anyone else: fresh data on whether thousands of borrowers were making their mortgage payments on time. But they did not begin to downgrade large batches of mortgage-backed securities until 2007—at which point the problems had become manifest and foreclosure rates had already doubled.23 “These are not stupid people,” Kroll told me. “They knew. I don’t think they wanted the music to stop.”
