Thursday, August 18, 2011

What goes around, comes around

Louise Story, New York Times, U.S. Inquiry Is Said to Focus on S.& P. Ratings
"The Justice Department is investigating whether the nation’s largest credit ratings agency, Standard & Poor’s, improperly rated dozens of mortgage securities in the years leading up to the financial crisis, according to two people interviewed by the government and another briefed on such interviews

"During the boom years, S&P and other ratings agencies reaped record profits as they bestowed their highest ratings on bundles of troubled mortgage loans, which made the mortgages appear less risky and thus more valuable. They failed to anticipate the deterioration that would come in the housing market and devastate the financial system.

"Since the crisis, the agencies’ business practices and models have been criticized from many corners, including in Congressional hearings and reports that have raised questions about whether independent analysis was corrupted by the drive for profits."

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1 comment:

  1. The message being sent it "don't mess with big brother". We can ruin your company and your business if you continue to criticize the US government on irresponsible debt and political fiscal management !

    This is very disturbing and reflects a very real problem.

    Thanks

    ReplyDelete

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