Why it pays to read the fine print

NEW YORK (Fortune) -- It's amazing how easy it is to get lazy and comfortable and accept things as they seem to be instead of trying to see them as they are. That's true, I'm sorry to say, even for someone like me who urges eternal vigilance and makes a living writing about financial fiascos.

So herewith are two examples of where I got so caught up in the moment that I didn't ask basic questions.

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Let's start with bank stocks. In the 38 years since I broke into business journalism by writing about banks and real estate at the Charlotte (N.C.) Observer, I've seen over and over again that holders of bank stocks get unpleasant surprises - and I get good stories - when something in the loan portfolio goes bad unexpectedly. I've seen the real estate investment trust loan fiasco; the underdeveloped country (now "emerging market") loan fiasco; several real estate busts; corporate takeover loans gone bad; and recently, SIVs.

SIVs, as you likely know, are those now-leaking "structured investment vehicles" that some large banks used to speculate in mortgage securities without having the big bet show up on their balance sheet. (Yes, these things aren't technically loans, but they're loan-equivalents because an entity related to the bank buys them with borrowed money.)

In the early 1980s, after I'd ceased being a bank reporter, I began putting serious money in bank stocks. (Previously, I'd confined myself to one share of each bank I covered, so I couldn't be barred from shareholder meetings.)

My holdings dwindled, but until last week, I kept a substantial stake in one large regional bank. This bank, which I won't name - suffice it to say I haven't written about it since I've had a serious stake in it, and its name hasn't surfaced in the SIV slide - paid a fat dividend and sold at low prices relative to its earnings and stated net worth. So I kept it, even though as years went by I found it harder and harder to decipher its financial statements.

On Oct. 16, I realized I was acting like a fool. Here's a banking problem in the world, and here I am with stock in a bank that I've known nothing about since my broker, who was also my friend and adviser, died five years ago.

I sold the entire position, even though I had to take what seemed like a low price for it. The only good news here - good for me, that is - is that the last time I looked, the stock was selling at 5% less than I got for it.

I'm not telling you not to buy bank stocks; I myself have one holding left, in a small local bank that I suspect a bigger institution will buy some day. Some of the smartest people I know own tons of bank stocks - though they're professional investors. But if you're a retail investor and you want to own bank stocks, do what I didn't do and pay attention to the loan portfolio. Or get advice from someone who does.

Now, to Part Two: the credit-rating agencies, whipping boys du jour for the junk mortgage mess. It's easy to write about how Moody's and Standard & Poor's, which are downgrading mortgage-backed securities right and left, did a terrible job in their original ratings of securities backed by junk or near-junk mortgages (which Wall Street calls "subprime" and "Alt-A," respectively). In fact, my colleague Doris Burke and I did just that as part of our recent piece dissecting a particularly-wretched issue floated by Goldman Sachs, GSAMP Trust 2006 S-3. It's one of the issues where securities originally rated AAA have been cut to BBB.

But even a skeptic like me missed a basic point. It's this. How can any mortgage-backed security - or any corporate security, for that matter - deserve the same AAA rating that the U.S. government gets? Sure, today General Electric (Charts, Fortune 500) and Berkshire Hathaway (Charts) (note: Berkshire is one of my largest individual stock holdings) look stronger than onion grass, as we used to say in Charlotte. But ten years from now? Who knows? GE, Berkshire and mortgage-backed securities don't have the power to raise taxes to get the money to pay their debts, as Uncle Sam does. And, of course, they can't print currency.

In these inflationary times, I'm not suggesting that we downgrade Berkshire or GE. What we probably need is a new and unique rating for Uncle Sam. AAAA, anyone?