Calculated Risk noted yesterday that Fitch, the ratings agency, downgraded over $37 billion of CDOs from AAA to Junk bond status “in one fell swoop.”

What good is a ratings agency if it:

a) moves bonds from essentially the same rating as US government bonds to junk in one day and;
b) the move comes after the entire world has realized the bonds are junk?

I understand mistakes, but this is a big one, and the rating of CDOs presumably has been around for years.