having models that did not recognize the objective risk conditions in the field. reporter: giselle james fell into foreclosure just like millions of other of home buyers who could not afford their mortgages. it turns out that, no, this wasn t so safe. the rating firms had been way over-optimistic. reporter: based on aaa ratings, ohio s pension funds bought 263 of the mortgage securities. when the housing bubble popped, the investments plummeted. s&p 500 and moody s and fitch cut their readings from super safe to junk. but it was too late. ohio s pension plans lost $456 million. our investors and retirees were victims of what the rating industries did here. it s up setting. many of them know the systems have been hurt. they worry about getting their
here s these 100 mortgages, they ve been packaged up to now we ll call a security. reporter: securities of anticipated mortgage payments that wall street firms sold to investors. that s where the credit rating agencies come in. there are three players, standard and poor s, moody s and fitch. to tell investors what s the likelihood james and other home buyers can make their monthly payments, which are supposed to flow to the investors. the rating agency said homeowners like james were likely to pay their mortgages, very likely. so they gave those mortgage securities their top marks an effort critics say to generate more lucrative deals from wall street. the rating industries, if you want, betrayed the people by
industry. the white house is now involved. and the military is prepared to move ships and personnel to the region. this morning we re covering the story like in one else can. suzanne malveaux. and rob march yiano tracking th winds. let s start with reynolds wolf. reporter: the latest we ve got. despite reports, the coast guard hasn t confirmed the oil has made it to shore. at 7:00 eastern time they ll make an aerial reconnaissance. i can tell you it s been very active in this area, venice, louisiana. but this is certainly not the only one. there are many ports just like this. yesterday, bobby jindal declared a state of emergency for the state of louisiana. with that, they put out 170 feet 170,000 feet of emergency booms and putting out another half million before the next couple of days. they are acting quickly to try to stem the flow, the advance of this tremendous oil. you went out on a boat to get a closer look at the oil slick and how it s moving around in the wind