Calif. Atty General Launches Rating Agency Probe

MarketWatch/FoxBusinessNews ^ | 9/17/09 | Alistair Barr

[Kartographer]

California Attorney General Edmund Brown launched an investigation Thursday into the largest rating agencies to see if they broke state law by slapping top ratings on toxic mortgage securities during the credit boom. Brown said that his office subpoenaed Moody's Corp. , Standard & Poor's, owned by McGraw-Hill , and Fitch, owned by France's Fimalac . "Standard & Poor's, Moody's and Fitch put their seal of approval on high risk mortgage-backed securities, recklessly giving stellar ratings to shaky assets that proved toxic to the entire financial system," Brown said in a statement. "This investigation is meant to determine how these agencies could get it so wrong and whether they violated California law in the process."

[Kartographer]

This could be a real hornets nest if investigated properly. It could also led to billions of dollars in lawsuits.

[the invisib1e hand]

it's a press release.

is it any coincidence that here in NY we're hearing ads on the radio for CA's latest bond float?

[Notary Sojac]

About damn time. Here’s where I really want to see some orange jumpsuits.

[Anti-MSM]

If they were giving top rating for State of CA debt, then I’d have to agree the ratings are fraudulent.

[Grampa Dave]

Many of us have wanted an investigation into the rating industries.

Now the most unlikely person in California may do the investigation, ex gov Moonbeam, who is planning a redux as Gov Moonbeam.

[Grampa Dave]

An interesting fallout and potential oportunity is the bad rating most companies have after the meltdown. One of my younger relatives back in late April recommended buying HIX which is an etf specializing in junk bonds. I told him that I didn't believe in Junk Bonds. His response was, "Just about every corporate bond became a junk bond during the meltdown".

So I bought some for both of our IRAs in early May. Below is the chart showing how this ETF has done versus the S&P 500 and Dow. Last but not least it is paying a monthly dividend that will be about 12% per year.

[Ernest_at_the_Beach]

Here is my chart of interest:

[Grampa Dave]

IBM is back to where it was a year ago.

How much of a hit did IBM take in July/Aug and early September last year?

That two and half month period of blood letting at Wall St destroyed companies and severely wounded many others.

[tubebender]

Jerry Brown is running for Governor of Kalif next year...