Mortgage Meltdown: was the writing on the wall

The N.Y. Times (primary authors NELSON D. SCHWARTZ and VIKAS BAJAJ; reporting contributed by Jenny Anderson, Eric Dash and Gretchen Morgenson) presents an excellent inquiry (and perhaps answers) regarding How Missed Signs Contributed to a Mortgage Meltdown.  Apparently, while some saw the writing on the wall (and only precious few reacted), others say there is nothing anomalous about the warning signs predicating the current serious downturn in the subprime mortgage market:

The blame game is already beginning. The spotlight will focus first on rating agencies like Moody’s and Standard & Poor’s, because the mortgage-backed bonds that plunged in value in recent weeks were highly rated by these agencies until they downgraded billions worth of them in July.

A Toll on the Economy

Other companies face far more immediate problems. Countrywide Financial, the nation’s largest independent mortgage lender, found itself fending off reports this month that bankruptcy could be looming as its stock plunged 41 percent.

Yet as recently as March, Angelo R. Mozilo, the chief executive of Countrywide, appeared on CNBC and proclaimed that worries about the subprime sector were “clearly an overreaction.” He promised that “this will be great for Countrywide at the end of the day, because all the irrational competitors will be gone.”