"An S&P employee likened the unit rating residential mortgage-backed securities to hostages who have internalized the ideology of their kidnappers.... the same banks that were assembling and selling the investments"
Sounds like Congress, doesn't it?
"Credit rating agencies had doubts by 2006" by Sewell Chan, New York Times | April 23, 2010
WASHINGTON — As the housing market began to falter in 2006 and the risks embedded in Wall Street’s giant collective bet on subprime mortgages became apparent, a sense of omen filled the corridors of Standard & Poor’s and Moody’s, the two big credit rating agencies.
“Rating agencies continue to create an even bigger monster — the CDO market,’’ one S&P employee wrote in an internal e-mail message that December, referring to the collateralized debt obligations that emerged at the heart of the financial crisis. “Let’s hope we are all wealthy and retired by the time this house of card falters.’’
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Although the agencies were supposed to offer objective and independent analysis of the securities they rated, the documents released by Levin’s panel showed the pressures the companies faced from their clients, the same banks that were assembling and selling the investments.
“I am getting serious pushback from Goldman on a deal that they want to go to market with today,’’ a Moody’s employee wrote in an internal e-mail message in April 2006.
In an August 2006 message, an S&P employee likened the unit rating residential mortgage-backed securities to hostages who have internalized the ideology of their kidnappers.
Yeah, the poor rating$ agencie$, huh?
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