So, S & P do not listen to the Obama Admin when it comes to the downgrade

[rushmc 18]

So now this?

Just interesting IMO

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Justice Department Reportedly Investigating Standard & Poor's

http://www.foxnews.com/politics/2011/08/17/doj-reportedly-investigating-standard-poors/

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[DanG 1]

1st sentence of the 2nd paragraph:

Quote

The investigation began before Standard & Poor's cut the United States' AAA credit rating this month...

- Dan G

[DougH 270]

I am with Dan here, this has nothing to do with the US downgrade, and charges both civil and criminal should have been made against all of the rating agencies a long time ago.

Their AAA ratings for dog shit collateralized debt instruments was nothing short of criminal neglegence.

Incompetent bullshit.

"The restraining order says you're only allowed to touch me in freefall"
=P

[rushmc 18]

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1st sentence of the 2nd paragraph:

Quote

The investigation began before Standard & Poor's cut the United States' AAA credit rating this month...

That is a good point

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[weekender 0]

Quote

I am with Dan here, this has nothing to do with the US downgrade, and charges both civil and criminal should have been made against all of the rating agencies a long time ago.

Their AAA ratings for dog shit collateralized debt instruments was nothing short of criminal neglegence.

Incompetent bullshit.

Im not defending anybody but it isnt neglegence if you make an opinion on the information supplied. I realize im getting pretty granular here but does any of us know how they decide a rating? I do not. I assume they request information from the issuer and combine it with public information. If their decision is based on bad info that isnt there fault. That very well could have been the case here. If so, the ratings agencies will be free of responsibility. Its pretty common with other securities and thats why i bring it up

Again, im not defending anyone so if you think i am reread my post before responding to me.

"The point is, I'm weird, but I never felt weird."
John Frusciante

[DougH 270]

You can not blindly rely on information supplied to you. Same deal for accountants and auditors.

When I am out reviewing a tax provision for a public company I can't simply take my client at his or her word, I need to exercise professional skepticism.

I think they neglected to do their homework, and I doubt they even had the financial savy to understand the instruments they were rating.

In this case they should have reviewed the underwriting guidlines for these loans, which were nill considering they were subprime no doc loans.

They should have looked at the credit risk associated with the loans that were getting packaged.

They should have verified that there was actual collateral backing these instruments up. Which there really isn't since banks originating these morgatges didn't record the leins with the courts, and didn't perfect their security interest.

"The restraining order says you're only allowed to touch me in freefall"
=P

[weekender 0]

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You can not blindly rely on information supplied to you. Same deal for accountants and auditors.

When I am out reviewing a tax provision for a public company I can't simply take my client at his or her word, I need to exercise professional skepticism.

I think they neglected to do their homework, and I doubt they even had the financial savy to understand the instruments they were rating.

i dont know. you very well could be right.

The SEC mandates that financials must be reported publicly in equities. These were derivative products and unregulated so what was the ratings agencies responsibility? It might have been similiar, which sounds normal to me. in that case they arent going to be held responsible. like it or not.

In equities if the financials are wrong the rater is not held responsible. That is why many professionals dont pay attention to ratings unless it suits them well for marketing. Otherwise, they are often taken with a grain of salt. afterall, they are based only on the information given and could easily be wrong. In this case many specifically used the rating to market them to clients. I have no idea who knew what and when but if i had to guess, those are the ones who will be found guilty.

somewhere out there is an email from a principal to a salesmen. in it they cleary state they dont believe the rating but want to makes sales anyway. IMO, those are the guys who will go down. the salesmen who knew they were selling a bad product. not the rater, not the PM and not the trader. just my guess

"The point is, I'm weird, but I never felt weird."
John Frusciante

[SkyDekker 1,129]

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1st sentence of the 2nd paragraph:

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The investigation began before Standard & Poor's cut the United States' AAA credit rating this month...

I am sure the downgrade moved the file to the top of the pile on somebody's desk though...

[DougH 270]

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In equities if the financials are wrong the rater is not held responsible. That is why many professionals dont pay attention to ratings unless it suits them well for marketing. Otherwise, they are often taken with a grain of salt. afterall, they are based only on the information given and could easily be wrong. In this case many specifically used the rating to market them to clients. I have no idea who knew what and when but if i had to guess, those are the ones who will be found guilty.

somewhere out there is an email from a principal to a salesmen. in it they cleary state they dont believe the rating but want to makes sales anyway. IMO, those are the guys who will go down. the salesmen who knew they were selling a bad product. not the rater, not the PM and not the trader. just my guess

I think they are responsible because they rated them, they took ownership. If they didn't want to dig deep they should not have rated them.

Once they decided to rate these, be it DOGSHIT Double B, or AAA, they took ownership of the whole deal, and they should have done their due dillegence.

I am not saying the rating agencies should be 100% right and predict the future. But if they are going to rate something they should be obligated to verify the information they are getting, and understand the products they are rating.

Anderson went bust after Enron due to its poor auditing, lack of independence, and complete absence of professional skeptcism.

Stock analysts are in the same boat, earnings constantly beat or miss analyst predictions, that is the nature of the beast. But if an analyst knew that a companys primary product was going to have it patent expire and there is nothing else inthe pipeline their R&D pipline , and ignored this knowledge when looking at a company, I would say that is pretty negligent, and pretty stupid!

"The restraining order says you're only allowed to touch me in freefall"
=P

[weekender 0]

here is the difference as i know it. companies are expected to have independent auditors. These financials are the ones filed with the SEC. People use those to rate the company. The rating is based on this and if its wrong the company, like Anderson, takes the hit. NOT the rater. Thats equities. as ive stated, i dont know how it works with these securities. I'm willing to bet its the same though. i see no reason it would be different.


unfortunatly, imo, to many people put their trust in a rating agencies without understanding what they do. They are not detective agencies. they use public information and make an opinion. THAT is why a good sellside analyst is loved. they do the detective work and are payed well for it. an S&P analyst makes six figures while a sellside analyst can make millions.

sell side analyst is what your calling a stock analyst. think Abbie Cohen at GS. They do the detective work. Not S&P. seperate and NOT equal.

"The point is, I'm weird, but I never felt weird."
John Frusciante

[kelpdiver 2]

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Quote

1st sentence of the 2nd paragraph:

Quote

The investigation began before Standard & Poor's cut the United States' AAA credit rating this month...

I am sure the downgrade moved the file to the top of the pile on somebody's desk though...

yes, in the same way that we were looking for Bin Laden for nearly 8 years before Obama pushed it to the top of the pile.

It's been 3 years since the crash, and within a couple weeks of the downgrade it's now a top priority. Coincidence? Of course not.

If they find a smoking gun - like senior management overruling a recommendation to downgrade a CDO package, then the entire financial world will want to dogpile the blame on them. As one of the auditors, they were in a position to stop the bubble. Everyone else can pretend to have relied upon them.

[rushmc 18]

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1st sentence of the 2nd paragraph:

Quote

The investigation began before Standard & Poor's cut the United States' AAA credit rating this month...

There are now some reports that say this is not correct

Will be interesting to follow

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[Andy9o8 0]

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It's been 3 years since the crash, and within a couple weeks of the downgrade it's now a top priority. Coincidence? Of course not.

Doesn't mean the fuckers don't have it coming, though.

Seriously, though, what we're witnessing is an example of the politics of comparative and competing power. It's interesting to watch; and for scholars, it's interesting to study.

[kelpdiver 2]

you can bet the other two agencies are watching very closely. One of them already reaffirmed the AAA rating this week.

[hwt 0]

Break that knee , Chicago style .

Eric Holder will get his just reward come 2013...

[billvon 2,406]

> So, S & P do not listen to the Obama Admin when it comes to the downgrade

Agreed. They did, unfortunately, listen to the republicans, who said they'd be OK with a default:

"If a bondholder misses a payment for a day or two or three or four -- what is more important is you are putting the government in a materially better position to better pay its bills going forward." - Paul Ryan

[Andy9o8 0]

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you can bet the other two agencies are watching very closely. One of them already reaffirmed the AAA rating this week.

Yeah, I saw that. Kind of like the tribute paid to the don by the surviving capos when the disrespectful capo is found bound and rotting in the trunk of a car.

Now everybody behaves nice and polite, eh? Good boy.

[rushmc 18]

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> So, S & P do not listen to the Obama Admin when it comes to the downgrade

Agreed. They did, unfortunately, listen to the republicans, who said they'd be OK with a default:

"If a bondholder misses a payment for a day or two or three or four -- what is more important is you are putting the government in a materially better position to better pay its bills going forward." - Paul Ryan

Interesting

You got a link that suggests the R cheered them on?

On the other side we have multiple news reports that state the Obama admin lobbied them NOT to down grade

Link? or are you just projecting again?

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[kelpdiver 2]

Quote

You got a link that suggests the R cheered them on?

It's not a matter of cheering them on, but when you have prominent Republicans saying that it's no big deal if we miss some payments and pay them later, of course that's going to factor into the credit rating, which is defined by the ability and willingness to pay back debts in a timely manner.

[rushmc 18]

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Quote

You got a link that suggests the R cheered them on?

It's not a matter of cheering them on, but when you have prominent Republicans saying that it's no big deal if we miss some payments and pay them later, of course that's going to factor into the credit rating, which is defined by the ability and willingness to pay back debts in a timely manner.

That is not what they were saying and that is not what was going to happen

That was just hype, and you bought into it

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[kelpdiver 2]

Quote

That is not what they were saying and that is not what was going to happen

That was just hype, and you bought into it

There's nothing ambiguous about that quotation that bill gave us. No, that's not hype. Because of that stated willingness to destroy our credit worthiness, Obama caved in the last hours. He showed a smidge more responsibility than they did.

[dks13827 3]

So our credit rating is just fine ?

[rushmc 18]

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Quote

That is not what they were saying and that is not what was going to happen

That was just hype, and you bought into it

There's nothing ambiguous about that quotation that bill gave us. No, that's not hype. Because of that stated willingness to destroy our credit worthiness, Obama caved in the last hours. He showed a smidge more responsibility than they did.

Not true

The info as to what would really happen was out there

It was not widely reported

The default bull shit was to just get a bill pushed through (and Obama was hoping to get a big one through so he would not have to deal with his crazy spending until after Nov of next year

If Obama (or any of them has any responsibilty) they would have told us the truth

An unknown word to most of those in Washington today however.

The Dems had the R's debating themselves because the fuck heads have not even offered a bill (as they are required to) since they got into office.

And then, there was a bill that would have stopped the down grade. A bill still desperatly needed

Cut, Cap and Ballance

Sorry you bought into the hype as well

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln