rssRating Agencies Raced to the Bottom
Wednesday, October 22, 2008 at 2:54 pm
- 48 Comments
The House oversight committee released a smattering of documents today from two big credit-rating agencies– Moody’s and Standard & Poor — on how they evaluated mortgage-backed securities and credit default swaps. One letter shows that S&P decided to lower its standard in rating mortgage-backed securities simply to compete with Moody’s.
In May 2004, a managing director at S&P, Yu-Tsung Chang, wrote a letter to a company executive complaining that S&P lost a “huge” mortgage-backed security deal because of a “huge difference in the credit support level.” Moody’s gave the mortgage-backed security a top rating apparently because it chose to ignore interest-rate risk. The S&P executive said that, “…we need to address this now in preparation for future deals.”
The letter (availabe in PDF) shows that there was no consideration of whether S&P’s rating system was correct on the merits.
The committee has focused on how the rating agencies didn’t appear to understand the financial instruments, derived from the subprime mortgage market, it was evaluating. But, more scandalously, they never developed new models to help understand them.
In the short term, this was beneficial: the combined profits of Moody’s and S&P went from less than $300 million to more than $600 million from 2002 to 2006. Now, however, the credit rating agencies may have “lost their brand,” as Rep. Chris Shays (R-Conn.) put it– and possibly their future role in evaluating financial instruments.
48 Comments
Trackback posted October 5, 2010 @ 5:46 am
Thank you……
Wow…. Amazing in a row.. Many credit…
Trackback posted October 9, 2010 @ 7:36 am
…
Extremely inspiring article, Many thanks !…
Trackback posted October 15, 2010 @ 1:06 pm
Best loan rate calculator and refinance…
Thanks for you compliment. I’ll keep writing articles and sharing useful infomation. Your support makes me passionate. :)…
Trackback posted October 16, 2010 @ 12:13 am
Best mortgage rate today…
My partner and i saw the following excellent blog post today related to your article……
Trackback posted October 16, 2010 @ 12:13 am
Best loan rate calculator and refinance…
Great posts, especially this one – thank you! :-)…
Trackback posted October 16, 2010 @ 12:38 am
Best loan rate calculator and refinance…
Thank you very much….
Trackback posted October 18, 2010 @ 3:04 am
Buy Soft Toys & Childrens Toy online now!…
I love the site…
Trackback posted October 18, 2010 @ 3:46 am
Healthy diet plan…
Finicky place of duty, I gonna bookmark this bleep. Credit on behalf of info…
Trackback posted October 18, 2010 @ 8:04 am
Rapid weight loss plan and diets…
I thought that was really helpful. Thanks for the cool post. I’ll keep following this….
Trackback posted October 21, 2010 @ 2:49 am
…
Yes, thank for the information a million! Ought to find anybody organizing Tea Party. I wants to participate in organizing….
Trackback posted October 21, 2010 @ 4:15 am
…
Your stage is valueble for me. Thanks!…
Trackback posted October 24, 2010 @ 1:01 am
…
OLA great advice and sharing,I’ll get this fantastic for me .many thanks! -NH….
Trackback posted October 24, 2010 @ 5:20 pm
…
This really is definately a single from the best blogs I have sen in ages online. Retain up the good posts….
Trackback posted November 1, 2010 @ 12:44 am
…
WSI Good publish! I’ll subscribe appropriate now wth my feedreader software package! -FR….
Trackback posted November 4, 2010 @ 10:49 am
…
URC You have got your stage via a great deal much better than I at any time could, thank you! -KZ….
Trackback posted November 5, 2010 @ 10:17 am
…
One in the best sites for relevant facts on this niche !!…
Trackback posted November 8, 2010 @ 10:49 am
…
Thank you to the well-thought article. I’m truly at operate correct now! So I have to go off without reading all I’d like. But, I place your website on my RSS feed to ensure that I can understand additional….
Trackback posted November 10, 2010 @ 12:48 am
…
IUN Quite inspiring submit, Thanks !! -VP….
Trackback posted November 12, 2010 @ 11:40 am
…
Wonderful website, many thanks a whole lot for the amazing posts!…
Trackback posted November 20, 2010 @ 1:14 pm
Best Family Holiday Travel Vacation Plan…
this is just perfect!…
Trackback posted November 21, 2010 @ 4:04 am
…
You guys have a wonderful weblog proceeding here, KIU!…
Trackback posted November 24, 2010 @ 9:12 am
Best Travel Tips, Tour Guide, Vacation Advice & Holiday Plan…
I love this post – totally kewl!!! Well done! I’m coming back to this one ……
Trackback posted November 24, 2010 @ 9:49 am
…
Extremely frequently I go to this web site. It really significantly is pleasant to me. Many thanks the author!…
Trackback posted November 27, 2010 @ 11:11 am
…
This is a good web site post and I defer for you what you have mentioned below. I’ve previously subscribed to your RSS feed in Firefox and will likely be your typical reader. Thank you for your time in writing the article….
Trackback posted November 28, 2010 @ 11:08 am
Great Photography Tutorials…
I must say, I enjoy reading your site. Maybe you could let me know how I can subscribing with it ? Also just thought I would tell you I found this site through google….
Trackback posted December 1, 2010 @ 10:00 pm
…
This article may well be pointed out on Twitter by somebody. genuinely?…
Trackback posted December 3, 2010 @ 12:12 am
…
I saw this truly excellent post these days!…
Trackback posted December 3, 2010 @ 4:48 am
…
Curious to see what all you intellectuals need to say about this……….
Trackback posted December 3, 2010 @ 9:12 am
…
Okay article. I simply found your website and wished to say I have actually enjoyed reading your ideas. By any suggests I’ll be subscribing in your feed and I definitely hope you submit once more quickly….
Trackback posted December 3, 2010 @ 9:42 am
…
Yes, thank for the info a million! Must find anyone organizing Tea Party. I would like to participate in organizing….
Trackback posted December 3, 2010 @ 10:55 am
Free Games Download – Free Games Online – Free PC Games…
Superb article ,I really appreciated with it, This is finicky to read and valuable on behalf of outlook,I really bookmark it, on behalf of expand read….
Trackback posted December 4, 2010 @ 11:15 am
Latest Software Reviews, Software Recommendations & Software Comparison…
Excellent post. Thanks….
Trackback posted December 6, 2010 @ 12:14 am
…
Yes, thank for your data a million! Need to discover anybody organizing Tea Party. I would like to participate in organizing….
Trackback posted December 7, 2010 @ 12:01 pm
…
This article may be pointed out on Twitter by somebody. really?…
Trackback posted December 15, 2010 @ 8:09 am
…
Curious to determine what all you intellectuals have to say about this……….
Trackback posted December 23, 2010 @ 8:00 am
…
You’ve got your place through a lot much better than I at any time could, thank you!…
Trackback posted December 25, 2010 @ 12:22 pm
Low Fat & Low Carb Recipes – Healthy Diet Recipes…
nice list..really helpful….
Trackback posted December 25, 2010 @ 2:06 pm
Unique Wedding Ideas Planning…
Valuable information and excellent design you got here! I would like to thank you for sharing your thoughts and time into the stuff you post!! Thumbs up!…
Trackback posted January 1, 2011 @ 3:08 am
…
Primary thing , A big thanks for you to open my eyes….
Trackback posted January 2, 2011 @ 3:01 pm
…
Incredibly frequently I go to this weblog. It incredibly significantly is pleasant to me. Many thanks the author!…
Trackback posted January 17, 2011 @ 6:03 am
…
I would like to thank you to the endeavors you might have produced in publishing this article. I am trusting the exact same ideal function from you in the future too. In fact your fanciful writing abilities has inspired me to begin my very own website …
Trackback posted January 20, 2011 @ 11:44 pm
…
Me and my friend were arguing about an concern similar to this! Now I know that I was right. lol! Thanks to the information you post….
Trackback posted February 6, 2011 @ 9:45 am
Low Fat & Low Carb Recipes – Healthy Diet Recipes…
On behalf of a sustained era, I am looking an place of duty like such a subject matter. Right now I give rise to found it. Thank you on behalf of your sharing, chap!…
Trackback posted February 6, 2011 @ 10:53 am
Best Weight Loss and Health Fitness Exercise Tips…
Appreciation pro this in turn. I think someone need around help like this….
Trackback posted February 6, 2011 @ 11:34 am
Best Weight Loss and Health Fitness Exercise Tips…
I love this blog. Its great. Keep it up man….
Trackback posted February 8, 2011 @ 7:02 am
…
That is definately one particular from the very best blogs I’ve sen in ages on the net. Retain up the wonderful posts….
RSS feed for comments on this post.
Sorry, the comment form is closed at this time.
