I agree, but Moody's does have a reasonable defense against being called a failure.

We can't really expect them to ascertain the true state of things, because that is impossible and nobody can do that. And if they could do that, they'd put their knowledge to use as a trading firm rather than telling people what is going on.

Their job is to compile what 'everyone' knows and report it because that is all they can reliably do. That is something that can be achieved consistently, and that their customers probably do want to know.

> Moody's does have a reasonable defense against being called a failure.

"the subjects of their analysis are also their clients." sounds less like failure and more like fraud. 'Failure' is what they hope it's seen as, to avoid legal consequences.

Are you holding any investment grade bonds in your portfolio? If so you are directly rely on their (and other rating agencies) data. The fact that rating agencies fucked up mortgage in 2008 doesn't mean they can't see other real problems.

Also, if you're holding any high grade/investment bond ETFs you're very likely to own some mortgage backed securities in there.