There are three primary credit rating agencies in the United States – Standard and Poor’s, Moody’s, and the Fitch Group. All of these rating agencies failed to properly assess the dangers of bundled assets that would ultimately create the foundation for the severe economic downturn of 2007 and the Great Recession of 2008 and beyond. Only one credit agency though has since downgraded the federal government’s credit rating since then – due in great part to the shockingly irresponsible deficit spending of the Obama administration. And now, only one credit rating company is being sued by the same Obama administration for $5 billion dollars…
(If you embarrass or criticize Barack Obama – you pay. Big time…)
EXCERPT: (via WHD)
Is S&P Getting the Chicago Treatment?
As you may be aware, the Justice Department is suing Standard & Poor’s to the tune of $5 billion for giving all those nice ratings to banks’ subprime mortgage-backed securities even while the market began to fall apart – as homeowners figured out they should have rented, bought cheaper homes, or moved in with their parents.
I have no issue with, at the very least, an investigation of these ratings agencies, which profited handsomely from their incestuous relationships from the very banks they were rating.
My problem is not that the government is suing S&P. My problem is that it is notsuing Moody’s and Fitch.
Because you see, happens that, of the three credit rating agencies, ONLY S&P INJECTED A NOTE OF HONESTLY INTO GOVERNMENT ACCOUNTING by downgrading the federal government’s credit rating last year.
S&P’s attorney Floyd Abrams tells us that “things seemed to rev up in terms of the intensity” of the federal investigation after S&P’s historic downgrade of United States credit following Washington’s debt-limit fight in 2011.
Meanwhile, a McClatchy Newspapers MNI -2.01% report says that it was around that time that Moody’s, which did not downgrade the government, was dropped from the federal investigation. Ask any investor and he’ll likely tell you that Moody’s was equally awful in forecasting the mortgage debacle. LINK