TAKEAWAYS
1. The CRAs provided the AAA investment grade ratings to the "financial products" - read: the cards in the investment banks' version of 3 card monte - based upon the crapass subprime mortgages.
2. That the CRAs gave their approval is one thing. That their payouts came from the investment banks -- the ones who concocted the 3 card monte financial packages! -- is quite another. This is called conflict of interest where I come from. I come from the United States. Unfortunately, we now live in Bizarro world, where things like "conflict of interest" don't exist.
3. The CRAs ho'd for money by committing fraud, and the banks were their pimps. While it's perfectly legal to give one's opinion about something, it's quite another when the government is certifying you as a ratings agency to do so on behalf of the public good.
4. Why is no one in the mainstream press/mass media talking - long and hard - about this?
If you go here you can see their statements given to yet another fancy shmancy committee: The Committee on Oversight and Government Reform, chaired by Edolphus Towns. This happened October 22, 2008.
From Henry Waxman's (my rep) statement:
The leading credit rating agencies grew rich rating mortgage-backed securities and CDOs. ...total revenues for the three firms doubled from $3 billion in 2002 to over $6 billion in 2007. At Moody’s, profits quadrupled between 2000 and 2007. In fact, Moody’s had the highest profit margin of any company in the S&P 500 for five years in row.
Says a lot, doesn't it?
