Study Finds Flawed Practices at Ratings Firms (Let’s hope we are all wealthy and retired ...)

NYT ^ | 07/09/08 | MICHAEL M. GRYNBAUM

[TigerLikesRooster]

Study Finds Flawed Practices at Ratings Firms

By MICHAEL M. GRYNBAUM

The analyst at the credit ratings agency was blunt: “Let’s hope we are all wealthy and retired by the time this house of cards falters.”

That candid assessment, sent by e-mail to a colleague in December 2006, referred to the market for certain investments linked to subprime mortgages — investments that were assigned top AAA ratings from major agencies, only to later plummet in value.

That e-mail message and dozens like it were disclosed Tuesday in a blistering 37-page report issued by the Securities and Exchange Commission, which confirmed what many on Wall Street had long suspected: the major ratings firms, including Fitch, Moody’s and Standard & Poor’s, flouted conflict of interest guidelines and considered their own profits when rating securities, among other suspect practices.

[TigerLikesRooster]

“Let’s hope we are all wealthy and retired by the time this house of cards falters.”

'nuff said.

[TigerLikesRooster]

Ping!

[razorback-bert]

All three ratings agencies issued statements on Tuesday that expressed a commitment to reforming their ratings practices.

Translation, we recoginze that the livestock are out of the barn and we are working on a latch to keep the barn doors closed.

[ScreamingFist]

All three ratings agencies issued statements on Tuesday that expressed a commitment to reforming their ratings practices. None commented directly on the e-mail messages or the report’s conclusions. Each firm said it welcomed regulatory suggestions from the S.E.C.

I have some "regulatory suggestions"......it starts with formal charges and ends in the "frog march"......

[Travis McGee]

House of cards is right.

[elkfersupper]

I once had the assignment back in the early 1990's to explain the nuances of 40+ separate issuances of tax-exempt housing bonds collateralized by single-and multi-family mortgages to a S&P analyst over the course of a week.

22 years old, female, ivy league degree,......and clueless.

Fortunately, her boss was WW II generation and eventually persuaded her to get it right.

What we are seeing is the effect of the baby boomers in charge.

[TigerLikesRooster]

What we are seeing is the effect of the baby boomers in charge.

Yes, these guys are living in cloud 9. Messy realities seem so distant to them.

[GOPJ]

Thanks for the ping.

[grey_whiskers]

22 years old, female, ivy league degree,......and clueless.

(Just guessing mode):

...and arrogant, on account of her supposed academic pedigree?

...and indoctrinated into the feminist schtick that "anything a man can do, a woman can do better" ?

Cheers!

[Freedom_Is_Not_Free]

Just criminal. They have no credibility. None. Future ratings are garbage.

[Wolfie]

Yep, but whatever you do, don’t regulate ‘em. Cuz that would be, like, socialist and stuff.

[elkfersupper]

You got it. Plus a proud bisexual.