Posted on 06/21/2013 11:28:11 AM PDT by posterchild
What about the ratings agencies?
That's what "they" always say about the financial crisis and the teeming rat's nest of corruption it left behind. Everybody else got plenty of blame: the greed-fattened banks, the sleeping regulators, the unscrupulous mortgage hucksters like spray-tanned Countrywide ex-CEO Angelo Mozilo.
But what about the ratings agencies? Isn't it true that almost none of the fraud that's swallowed Wall Street in the past decade could have taken place without companies like Moody's and Standard & Poor's rubber-stamping it? Aren't they guilty, too?
Man, are they ever. And a lot more than even the least generous of us suspected.
Thanks to a mountain of evidence gathered for a pair of major lawsuits by the San Diego-based law firm Robbins Geller Rudman & Dowd, documents that for the most part have never been seen by the general public, we now know that the nation's two top ratings companies, Moody's and S&P, have for many years been shameless tools for the banks, willing to give just about anything a high rating in exchange for cash.
(Excerpt) Read more at finance.yahoo.com ...
' . this has to be the stupidest place I have worked at," writes one Standard & Poor's executive. "As you know, I had difficulties explaining 'HOW' we got to those numbers since there is no science behind it," confesses a high-ranking S&P analyst. "If we are just going to make it up in order to rate deals, then quants [quantitative analysts] are of precious little value," complains another senior S&P man. "Let's hope we are all wealthy and retired by the time this house of card[s] falters," ruminates one more.'
Notice that the role of the gov’t, Fannie Mae, Freddie Mac (who bought all the garbage paper), the Fed (kept interest rates too low for too long), and politicians who pressured banks to reduce the requirements for home ownership, is not discussed at all.
Matt has already covered that over the years.
Does anyone, who is not currently institutionalized, actually believe the ratings agencies ratings? If so, go to Angie’s List and use her ratings and then try to sue her .... been tried and failed....same game different name.
Try Weiss Watchdog; if memory serves, he was hammering the banks when everyone else was saying “nothing to see here”; 10 free ratings of financial companies of your choosing.
That’s because they weren’t the major factors in the financial crisis no matter how often know-nothings like Hannity insist they were.
For your own edification, Fannie and Freddie did not “buy all the garbage paper”)- they dealt in conforming loans, even in the subprime market. The high yielding toxic paper was developed by their private sector rivals, rivals who were eating F&F’s market share during the bubble.
And the claim that problem was “politicians pressured banks to make bad loans” is equally fallacious- the CRA applied only to deposit takers- not one Wall Street investment bank, pure mortgage lender, or hedge fund was covered by the law, and they cranked out far more loans than retail banks.
Repeating “it was all the government’s fault” is politically satisfying but it’s bull manure. Conservatives should be dedicated to getting to the truth and not being satisfied with convenient stories. There was a confluence of events in the mortgage industry that led to the bubble and most of them had to do with ignoring risk.
“Repeating “it was all the government’s fault” is politically satisfying but it’s bull manure.”
Finally some one willing to tell the truth. The government may have provided some seeds, but it took the private sector to plant, fertilize, water, hoe and harvest the sub-prime debacle.
The rating agencies were supposed to be the firewall that prevented something like this happening. Money and greed passed through many hands.
The transfers were illegal,yet no criminal charges have been filed and it has been officially stated that none likely will be.
Of course, the CEO was former Goldman-Sachs CEO Jon Corzine who was campaign bundler for Barry as well as putting his name in nomination in 2008.
For a lot of reasons what was done here could be argued was worse than with Madoff.
Madoff account holders accepted the risk that Madoff was "investing" their funds. The account holders at MF Global did not accept the risk of Corzine placing bets on foreign sovereign debt for his NWO buddies.
Corzine was as wired as anyone because he had held the highest power in the political party elites as well as the robber barons of Wall Street.
The clowns in media elites have dropped this story like a lead balloon. CNBC, Bloomberg, and Fox Business are worthless. They never saw the MF Global thing coming and once it happened that wanted to see as less of the story as possible.
I’m not saying the private sector was blameless. However, if you allow the private sector to live and die by the risks they take, it tends to not take stupid risks over the long run, and it tends to clean itself out once losses are taken (re: no bailouts).
Assuming that the Triple A rating was a major root cause, who forced everybody to use three rating agencies’ ratings as if they were gold, creating a virtual cartel? Why, it’s the government! Had they allowed other ratings or ways to determine risk beside the big 3, competition in the market place would have destroyed the big 3 if they had stayed this lazy and this corrupt. That obviously couldn’t happen because of government interference.
Well then, I guess it’s all ok. Nothing to see here, until it happens again, but hey, that’s nobody’s fault either, so what the hell. Onward and downward.
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