No shit oh wise one, believe it or not, even in the ivory tower we read the newspaper.
But your point is...? Since when is it sound business (more importantly risk-free) to blindly believe shoddy ratings, inaccurate data, and unrealistic models?
Seriously--this isn't even a question of whether or not the false wizardy was scientifically or even mathematically valid. We are seeing the proof that the people at the controls either don't have a fucking clue what they are doing, or overtly intended to invent some quick profits and run while causing a meltdown.
Coming back to my original point (which you have yet to address by the way), trying to blame the insane business decisions of delusional and terribly negligent executives on academics is ridiculous. Part of what these guys (execs) are paid the big bucks for is to know when something is too good to be true.
Case in point (and trying to bring this shit back on topic)--you don't automatically agree with Gary just because he is an academic, now do you? Well apparently, that's where you and I differ from the guys in control of these billionaire investment firms.
Oh and
Enter the business world and report back.