We're surprised as you are to hear ourselves parroting New York senator Charles Schumer but that's what it's come to: the truly shocking thing about yesterday's Financial Times report on Moody's screwing up the ratings on complex debt derivatives is that it took Moody's nearly a year to fix the problem after it was discovered.
"The ratings inaccuracies that were disclosed are deeply troubling," Schumer wrote in a letter sent to the Securities and Exchange Commission yesterday. "However, the fact that Moody's only downgraded these incorrectly rated products in January of 2008, nearly a full year after they became aware of the problem, is much worse, and is indicative of a culture of shirking responsibility that must end."
Moody's says it has employed Sullivan & Cromwell, the white shoe law firm right next door to Goldman Sachs, to conduct an external review. That's wonderful but, again, why did it take a report from the Financial Times to prompt the review?
Moody's launches review in wake of errors [Financial Times]
Posted by guest , May 22, 2008 9:17AM
First 'Rouge Traders', now 'Rouge Coders'. The spin continues.
Posted by guest , May 22, 2008 9:22AM
you mean rogue? unless these people enjoy wearing makeup...
Posted by guest , May 22, 2008 9:24AM
oh stop, everyone makes mistakes..its only a few billion, not like its a big number.
Posted by guest , May 22, 2008 9:48AM
Absolutely hilarious that anyone would believe that any of this was a 'mistake'. This is why if Goldman has five dollars and you have five dollars, Goldman has more money than you.
Why sell something as AAA that you know will not break, when you can sell it as AAA (cause it is worth more that way) and know it will break and you can buy it back cheap, "fix it" and sell it again.
Posted by guest , May 22, 2008 9:52AM
@ 9:22 - thanks i just spit my coffee on my keyboard
Posted by Anal_yst , May 22, 2008 9:54AM
Damn you rogue "-" sign, damnnnn you!!!!!
Posted by guest , May 22, 2008 9:58AM
Ok Rogue and not Rouge, stupid English language.
Posted by guest , May 22, 2008 10:03AM
ah oui, Il faut que nous changon de La Franglais
Posted by guest , May 22, 2008 11:00AM
The coding was fine - it generated millions in fees for the firm for rating risky products as good as gold - what's the problem?
Posted by guest , May 22, 2008 11:28AM
Well I suppose if the credibility of rating agencies disappears we can start affixing a sticker saying "Krusty approved" on the marketing materials or have Eric Estrada run the roadshows. Must...buy...Tellico Village property....
Posted by guest , May 22, 2008 12:42PM
Something from the accompanying FT article:
"CPDO = Complex derivative instrument conceived at the height of the credit bubble".
Instead, let's call them what they really are:
CPDO = Funds that used borrowed money to bet on Credit Default Flops (CDS).
CDS = Insurance against default on bundled junk (CDO).
CDO = Bundled junk with an AAA rating that was sold to bagholders.
AAA = Rating given by Moody's to the bundled junk that was packaged by the liars (IB).
IB = The banker liars on Wall St who made endless money available to MOZ.
MOZ = The clown at Countrywide who freely loaned the liars' money to the illiterates to make junk, which he then sold back to the liars so he could get more money to make more junk.
SIV = Structured Investment Vehicles that generated fees for banks and speculated on a variety of high-leverage loans used to finance the CPDO's. SIV's were kept off the bank's books to hide the Ponzi Scheme (PS).
PS = Many of the illiterates even know what that is.
Three Questions:
Would the illiterates have borrowed money from MOZ if he were not smiling?
Would Moody's have given up the AAA if the liars weren't smiling and/or if Moody's were not in collusion with the liars?
Would the bagholders have bought the bundled junk if the liars weren't still smiling from the AAA?
You can laugh at my comments all you want, and you can malign my writing style too, but can you tell me where I am wrong.
The illiterates didn't cause this mess; neither did Moody's. By themselves, there weren't enough shit mortgages to put barely a dent in the financial system.
I'd like to see every one of you goons on Wall St who had a hand in this "credit crisis" lose your job and be barred from ever working in the financial industry again. Some of you should end up in prison as well.
After that, your may turn your thoughts away from those $500 loafers and direct them to a decision between a $5 loaf of bread and a $5 gallon of gas.
The Guy from Delaware
P.S. Try to be more creative than: "TGFD = Fucktard"
Posted by Anal_yst , May 22, 2008 12:55PM
@ TGFD
Glad you're so open to understanding this mess, which is just as much the fault of each individual schmuck option-arm in orange county, ca as it is the fault of every banker at wall street. Everyone had a hand in the greed machine, and sans John Paulson and a few others, no one saw the fun coming to the inevitable screetching halt.
Posted by guest , May 22, 2008 1:00PM
@TGFD - do you hold the bag after your gay lover pulls out? Just curious.
Posted by guest , May 22, 2008 2:59PM
I'll ask again: why isn't this worse for S&P. They had the same rating as Moody's but they still maintain their model is fine. So they are claiming that their model would rate a security AAA that Moody's model (once corrected) would rate 4 notches lower.
I guess that's a good way to gain market share
Posted by guest , May 22, 2008 7:17PM
TGFD@12:42: WORD!
TOGFD
Posted by guest , May 22, 2008 9:38PM
TGFD = TOGFD = totally weird. Word!
Posted by guest , May 23, 2008 8:11AM
@9:38 pm = totally wrong. We are not the same person!
TOGFD
Posted by guest , May 23, 2008 8:25AM
okay guy from delaware. just cool your jets.
Posted by guest , May 23, 2008 9:42AM
ok. TGFD is the sock puppet on the left hand, TOGFD is the sock puppet on the right hand.