What's next: 4 prophets on the credit crunch

We asked a few of the financial clairvoyants who predicted the market's mortgage tribulations to tell us what happens next.

1 of 4

The ratings gadfly

"The market just came to the realization that values in credit assessments were far from the mark. Now, we're rapidly adjusting to that reality--and there's a lot more pain coming down the pipe."
Sean Egan, CEO, Egan-Jones Ratings

While Standard & Poor's, Moody's Investors Services, and Fitch Ratings drew heavy criticism after overrating mortgage securities, Egan-Jones Ratings, a small credit ratings agency based in Los Angeles, was lauded for its foresight. Sean Egan was an early critic of bonds backed by sub-prime mortgages.

"The core problem behind the current crisis was a false belief in inflated credit ratings," says Egan. According to the CEO, his competitors are still placing too much faith in a number of companies. Egan's main targets: the media, airline, auto and insurance industries, amongst others. For example, while the S&P gives MBIA, a major bond insurer, an A rating, Egan dropped a C-bomb on the firm--and projects a D rating in the future.

By Mina Kimes, writer

NEXT: The regulator

Last updated September 18 2008: 11:43 AM ET

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