" These senior claims were supposed to be very low-risk; after all, how likely was it that a large number of people would default on their mortgages at the same time? The answer, of course, is that it was quite likely in an environment where homes were worth 30, 40, 50 percent less than the borrowers originally paid for them. So a lot of supposedly safe assets, assets that had been rated AAA by Standard & Poor's or Moody's, ended up becoming "toxic waste", worth only a fraction of their face value. "