Standard & Poor’s

  • 20 Jan 2015 at 3:05 PM

SEC Suspends S&P For Being Bad

Standard_Poor_231211Standard & Poor’s will be suspended for a year from rating securities in the biggest piece of the commercial-mortgage bond market in a $60 million settlement with the U.S. Securities and Exchange Commission, according to a person with knowledge of the matter. The deal, which the person said may be announced as soon as tomorrow, will be the agency’s toughest action against a major credit rater. The SEC, which has been examining whether the credit rater bent criteria to win business in 2011, will ban the company from grading securities backed by multiple commercial loans, the person said. [Bloomberg]

The sun shines briefly on the benighted S&P.The DoJ may not be dealing, but the SEC and New York and Massachusetts AGs are feeling more reasonable this holiday season. Read more »

The liquidators want $1 billion for investors and the name of the rating agencies’ dealer for a friend. Read more »

  • 04 Feb 2013 at 5:10 PM

Controversial New Theory: S&P Got A Few Ratings Wrong

One day – one day soon – the Justice Department will sue S&P for mis-rating a bunch of CDOs, and when that happens let’s all read the complaint and then meet back here to discuss it, okay? [update!] In the meantime we have S&P’s preemptive denial:

A DOJ lawsuit would be entirely without factual or legal merit. It would disregard the central facts that S&P reviewed the same subprime mortgage data as the rest of the market – including U.S. Government officials who in 2007 publicly stated that problems in the subprime market appeared to be contained – and that every CDO that DOJ has cited to us also independently received the same rating from another rating agency.

I submit to you that this is not a great defense, though it has a certain intuitive appeal. If in fact it turns out that S&P knowingly gave terrible CDOs AAA ratings because they were being bribed by investment banks or whatever, then it doesn’t help them much that Moody’s, say, gave the same CDOs the same AAA ratings with pure hearts and empty minds.1 Intent matters; being evil makes you more liable than does being stupid.

More interesting, though, is the claim that “S&P reviewed the same subprime mortgage data as the rest of the market.” First of all, that’s an almost magically ridiculous statement. (Though, also: true!) S&P’s credit ratings not only had the force of quasi-law in 2007 when they were bopping around misrating CDOs: they still have the force of quasi-law today, and there’s no plan to change that. Basel III regulations rely on ratings-agency ratings all over the place. And yet S&P has no actual advantage over anyone else in deciding what’s a good credit risk.

So why would you rely on S&P to tell you what’s a good credit risk? Read more »

  • 11 Aug 2011 at 2:41 PM

Michael Moore Demands Justice


[via WT]

The drop could be attributed to anything- The shit in Europe. Rex Ryan’s tattoo. The god damn heat (and SACs busted AC). You have no idea. Read more »

As you may have heard, Standard and Poor’s knocked the US’s debt down to double-A plus from triple-A Friday evening. Several hours before it was made official, the ratings agency was notified their team had made some calculation errors but chose to say “fuck it, on with the downgrade.” This made a whole bunch of people very upset, including Treasury Secretary Tim Geithner, who commented S&P demonstrated “really terrible judgement, handled themselves poorly, showed a stunning lack of knowledge about basic US fiscal budget math, and…came to exactly the wrong conclusion” and Warren Buffett, who shared that he could not give less of a rat’s ass what S&P thinks, that he’s “not changing his mind about Treasurys based on the downgrade,” that “if anything, it may change my opinion on S&P,” and that the United States’s debt is like that of the first buxon milkmaid he laid his eyes on 70 years ago today- her tits may be down on the ground now but they’ll always be triple-A rated in his mind and that’s all that matters.

A slightly different reaction came from PIMCO CEO Bill Gross. He loved the downgrade and if we’re being really honest? It earned S&P some respect in his eyes, ’cause it showed the ratings agency has balls. Read more »

Off by $2 trillion? NBD. Read more »