On Portfolio.com, Michael Lewis (author of Liar’s Poker, which I really liked) has written a fantastic article titled “The End of Wall Street.”  It’s long, but well-worth reading.  Check out this quote:

He called Standard & Poor’s and asked what would happen to default rates if real estate prices fell. The man at S&P couldn’t say; its model for home prices had no ability to accept a negative number.

(My bolding.)