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2013-02-04 Economy
Dissent not allowed - US DOJ suing S&P over credit rating drop
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Posted by DarthVader 2013-02-04 15:53|| E-Mail|| Front Page|| [238 views ]  Top

#1 No, it doesn't say that. The DoJ will sue over the 2007-09 mortgage ratings fiasco, which S&P (and every other rater) thoroughly deserves.

Why in the world subprime mortgages could be bundled into securities such that the worst of the bundled mortgages could get AA and AAA ratings is beyond me, but perhaps S&P has an explanation. They'd better.

I support this -- raters need to know that their ratings have consequences.
Posted by Steve White 2013-02-04 16:57||   2013-02-04 16:57|| Front Page Top

#2 So the rating agencies had it wrong prior to the 2008 crash because they were bought by Wall St. and the govmint? Now when they are trying to regain some credibility by playing it straight, they get dinged by DOJ?
Posted by JohnQC 2013-02-04 16:59||   2013-02-04 16:59|| Front Page Top

#3 The temerity of S&P to downgrade the US when it breached the 100% debt ceiling must be punished. Moodys or Finch didn't, so Holder will make sure they are protected even though their credit ratings were just as "exuberant" as S&P before the financial meltdown.
Posted by tipper 2013-02-04 17:01||   2013-02-04 17:01|| Front Page Top

#4 Why in the world subprime mortgages could be bundled into securities such that the worst of the bundled mortgages could get AA and AAA ratings is beyond me, but perhaps S&P has an explanation. They'd better.

I think one of the problems lies in the bundling of bad loans with good loans. As I understand it they were sold as a package or bundle. The valuation was not easy.

Posted by JohnQC 2013-02-04 17:09||   2013-02-04 17:09|| Front Page Top

#5 and where was the SEC all this time?????????????
Posted by Raider 2013-02-04 17:13||   2013-02-04 17:13|| Front Page Top

#6 Steve this comes on the back of the Obama administration saying the credit agencies were in the wrong for downgrading the US. While the raters were wrong before, they aren't wrong now and this is pure retaliation of the Obama administration.
Posted by DarthVader 2013-02-04 18:07||   2013-02-04 18:07|| Front Page Top

#7 Solve credit problems the easy way.

Mandate that you can only get a bonus when the money is paid back, not when the money is loaned out.
Posted by Bright Pebbles 2013-02-04 18:27||   2013-02-04 18:27|| Front Page Top

#8 "Mandate that you can only get a bonus when the money is paid back, not when the money is loaned out."

... which would happen if we allowed banks to FAIL - when they failed.
Posted by Raider 2013-02-04 19:18||   2013-02-04 19:18|| Front Page Top

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