The rating agencies, in theory, were just such an authority. As the securities became more complex, the rating agencies became more necessary. Everyone could evaluate a U.S. Treasury bond; hardly anyone could understand a subprime mortgage–backed CDO. There was a natural role for an independent arbiter to pass judgment on these opaque piles of risky loans. “In Vegas it became clear to me that this entire huge industry was just trusting in the ratings,” Eisman said. “Everyone believed in the ratings, so they didn’t have to think about it.”
