“Waaaaaa”
It’s no secret that I have little sympathy for Standard and Poors and the other ratings agencies. Like carnival barkers at the securitization circus, S&P, Moodys and to a lesser degree Fitch, gave rosy ratings to the securitized bonds that made the Big Banks Big Money. For background on the scam, see my posts, here, here, and here.
Now that they’ve been sued by the U.S. Department of Justice, S&P has built a very robust website to get the word out (to anyone who cares) that it is an innocent victim of selective, belated, and retributive prosecution. Their website link is here.
However, it appears to me that some of the sources selected to convey their message of virginal innocence are pretty wimpy and whiny. Here’s are snippets from a February 25, 2012 article by the UK newspaper, “The Banker” that S&P posted on its website:
“The US Justice Department’s lawsuit against Standard & Poor’s (S&P) over subprime structured finance ratings, launched in February 2013, leaves many unanswered questions. Not least, why has it taken so long to act since the mass downgrades of subprime securities in 2007?”
TRANSLATION FROM BANKER-SPEAK TO PLAIN ENGLISH: “Waaaaaa! When we and our partners-in-crime all had our collective epiphany – commencing in July 2007 – and admitted that we had been rating junk and not gems – the DOJ should have sued the pants off us then and there! They didn’t; they waited five years! That must mean that we’re as pure as the wind-driven snow.”
“Neither of the other large agencies, Moody’s and Fitch, has yet been charged. And while all three had a commercial incentive to keep the subprime bandwagon rolling, none earned anything close to the fees generated by the investment banks who were packaging the securities themselves.”
TRANSLATION FROM BANKER-SPEAK TO PLAIN ENGLISH: “Waaaaaa! The Big Banks made more money on this scam than we did. Sure, we told investors around the world that the subprime straw was actually gold, but it was the Big Banks who were spinning it. We’re being picked on! Boo-Hoo!”
“S&P is the only one of the big three agencies to have cut the AAA rating on the US.”
TRANSLATION FROM BANKER-SPEAK TO PLAIN ENGLISH: “Waaaaaa! We were just doing our job in August 2011 – it was just our professional opinion that the country didn’t qualify for the AAA rating. But golly, AA+ is still pretty good – isn’t it? We’re willing to take it all back, if that helps. Waaaaaa! Besides, what difference did it make? Nobody paid attention to the downgrade anyway. A year later, the Dow was up 1600 points. It was called a “non-event by the Chicago Sun-Times. Sob!”
[For the real reasons behind the fed’s decision to go after S&P alone, read this leaked transcript of a DOJ meeting here, shortly before the lawsuit was filed. – PCQ]
