PETER BERNSTEIN on subprime mortgages and the credit crisis

Part 1, Feb 10, Peter Bernstein, author of Against the Gods and Capital Ideas Evolving, talks with Aline van Duyn, US markets editor, in his New York City office. He says the current credit crisis is a unique historical event, in which too many people took high risks in a low-risk environment, and as a result changed the environment. He believes risks appeared low, not least because so many securities carried triple-A credit ratings. "They [ratings agencies] became part of the delusion instead of being a monitor of the delusion", he says.