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It was not triple A that let to financial fsckup. It was lending money to people who cannot pay it back. As simple as that.
I wish people wouldn't badmouth AAA security. Once when I locked my car keys in the trunk, they came and got them out.
@Mr_D: lulz on the CDO
This quote caught my eye, explaining why what's unfolding now is so different from before:
"By providing the mortgage industry with an entree to Wall Street, the [rating] agencies also transformed what had been among the sleepiest corners of finance. No longer did mortgage banks have to wait 10 or 20 or 30 years to get their money back from homeowners. Now they sold their loans into securitized pools and - their capital thus replenished - wrote new loans at a much quicker pace."
I've got something to add to the Subprime Meltdown lexicon, after shenaniganization:
CDO - concentrated debt ordnance