- Joined
- Apr 29, 2012
- Messages
- 17,873
- Reaction score
- 8,364
- Location
- On an island. Not that one!
- Gender
- Undisclosed
- Political Leaning
- Socialist
Feds sue S&P over subprime ratings - Feb. 5, 2013
The Justice Department announced a lawsuit Tuesday against Standard & Poor's over its inaccurate ratings of investments tied to subprime mortgages in the run-up to the financial crisis.
The suit represents the first federal action in connection with the crisis against one of the country's major ratings agencies, which have long been cited as key culprits in the meltdown.
The Justice Department accuses S&P of giving deceptive ratings to mortgage securities between 2004 and 2007 that greatly underestimated the risk to investors. It did so, according to the suit, in order to collect fees from the firms that were pooling the risky home loans into securities.
Both sides are a bunch of gangster ridden hacks, with the government likely getting its instructions from Paul Krugman who's been critical of S&P.
not that I actually think any bankster will go to prison but still - it is a step in the right direction. A direction toward correcting the fallacious notion that Wall Street cares very much about honest behaviour.
more from Bloomberg - Default in 10 Months After AAA Spurred Justice on Credit Ratings - Bloomberg
not that I actually think any bankster will go to prison but still - it is a step in
the right direction. A direction toward correcting the fallacious notion that Wall Street cares very much about honest behaviour.
more from Bloomberg - Default in 10 Months After AAA Spurred Justice on Credit Ratings - Bloomberg
While I would hardly be surprised if the motivations for this suit are corrupt,
I'm not going to look a gift horse in the mouth. The rating agencies engaged in fraud by giving out AAA ratings to products they knew were crap and profited from doing so.
They gave them AAA ratings because those MBS were backed by the United States Govt through the GSE's.
Or did you forget by the time the dust cleared the GSEs were up to their eyeballs in toxic MBSs
The bought them, they bundled them, they sold them to investment bankers.
This is Chicago thug politics BECAUSE a Rating decreasre on our bonds is right around the corner.
That makes Captain dumbshyt look bad you know.
That's not so. The only thing the government stepped in on is (for example.) if a black man had a good credit rating, than he could not be turned down for a loan. The government can't make a financial institution proceed on a bad credit rating. And about those so-called Democrat thugs? let Standard and Poor start pointing fingers and bringing it in to a courtroom.You know when asking people for a down payment and refusing people that had poor credit history was deemed "racist".
That's not so. The only thing the government stepped in on is (for example.) if a black man had a good credit rating, than he could not be turned down for a loan. The government can't make a financial institution proceed on a bad credit rating. And about those so-called Democrat thugs? let Standard and Poor start pointing fingers and bringing it in to a courtroom.
When S&P gives a loan a AAA rating, they are making a good faith claim that they
believe it has a low risk of default. They are not saying "its a piece of junk but don't worry the government will bail you out anyway".
S&P made fraudulent claims when they gave crap mortgages AAA ratings and they should be brought to justice for it. I am not unaware that the motivations for the lawsuit may be corrupt, but that doesn't make the case invalid. Its extremely common for the government to do the right thing for the wrong reason.
Well I guess we will see when the trial starts, right? :shrug: :wink:It is true, CRA forced many bankers to lend money to people that normally would have been turned away.
Well I guess we will see when the trial starts, right? :shrug: :wink:
That's not so. The only thing the government
stepped in on is (for example.) if a black man had a good credit rating, than he could not be turned down for a loan. The government can't make a financial institution proceed on a bad credit rating. And about those so-called Democrat thugs? let Standard and Poor start pointing fingers and bringing it in to a courtroom.
Wrong. Please pick up a newspaper. I'll guarantee you that the states and the feds know something, and you are going to see it in that trial.:thumbs:Plueeeze pick up a book
The S&P isn't the cause or the one who engineered our near economic collapse. They held those MBS to the same AAA standards of the United States Treasury bonds and its not a coincidence since most of those securities were in fact guaranteed by the US Govt.
Show proof that the S& P knew the GSEs were bundling bad loans with good ones to sell off to fund the secondary market and I'll listen.
Eric Holder use to work for Janet Reno when banks were being strong armed into lowering underwriting standards for loans.
Its so petty and childish and blatant what they're doing by threatening the S&P. And right when the US is borrowing Trillions and tax reciepts are shrinking.
Of course the S&P's going to down grade our Treasuries.
When those who created it are either in power or share their ideology and are being ignored.
Barney Frank was allowed to write banking legislation on his way out. If there was one politician more responsible for the sub-prime debacle it was him.
Wrong, try again. The CRA was given regulatory power in the early 90s to stop "redlining". Redling is actually what banks have been doing for the last 100 years or so to guarantee they don't crash and burn lending bums money.
When S&P gives a loan a AAA rating, they are making a good faith claim that they believe it has a low risk of default. They are not saying "its a piece of junk but don't worry the government will bail you out anyway".
S&P made fraudulent claims when they gave crap mortgages AAA ratings and they should be brought to justice for it. I am not unaware that the motivations for the lawsuit may be corrupt, but that doesn't make the case invalid. Its extremely common for the government to do the right thing for the wrong reason.
not that I actually think any bankster will go to prison but still - it is a step in the right direction. A direction toward correcting the fallacious notion that Wall Street cares very much about honest behaviour.
more from Bloomberg - Default in 10 Months After AAA Spurred Justice on Credit Ratings - Bloomberg
and what's wrong with getting "instructions from Paul Krugman" (which they haven't but that's another story)? On the economic front he has been proven right more than any Austrian dreamer.
It is worth noting that 80% of sub-prime loans were issued by institutions which did not fall under the jurisdiction of the CRA. In other words, they deliberately sought out high-risk clientele of their own free will. Back then, the risk wasn't that great; a financial institution could easily wind up making a profit from a foreclosure. But then the Real Estate bubble burst, home values depreciated, and they were saddled with foreclosed properties no one wanted to buy.
Krugman is a biased weasel. I don't give a damn about his long list of credentials, he's purely political.
The S&P isn't the cause or the one who engineered our near economic collapse. They held those MBS to the same AAA standards of the United States Treasury bonds and its not a coincidence since most of those securities were in fact guaranteed by the US Govt.
Show proof that the S& P knew the GSEs were bundling bad loans with good ones to sell off to fund the secondary market and I'll listen.
Eric Holder use to work for Janet Reno when banks were being strong armed into lowering underwriting standards for loans.
Its so petty and childish and blatant what they're doing by threatening the S&P. And right when the US is borrowing Trillions and tax reciepts are shrinking.
Of course the S&P's going to down grade our Treasuries.
When those who created it are either in power or share their ideology and are being ignored.
Barney Frank was allowed to write banking legislation on his way out. If there was one politician more responsible for the sub-prime debacle it was him.
Suits reveal details on Standard & Poor's views - latimes.com
As the housing bubble was bursting in 2007, an analyst at credit rating firm Standard & Poor's made light of the situation with a song.
He went from office to office serenading co-workers with his ode to America's deepening real estate crisis. "Strong market is now much weaker, subprime is boi-ling o-ver, bringing down the house," the analyst sang to the tune of the Talking Head's "Burning Down the House."
The scene was among the details — some meant to be embarrassing — released in government lawsuits against the world's biggest credit rating firm. The complaints unveiled Tuesday by the Justice Department, and states including California, found S&P analysts seeming to mock their role as gatekeepers of the financial system, in which they are paid to grade the safety of stocks, bonds and other securities.
<snip>
Government investigators gathered emails and instant messages that they said showed S&P gave rosy ratings to securities that the firm knew were ready to implode. The lawsuits claim that executives were obsessed with maintaining good relationships with the banks that paid them to analyze securities. And when those securities began to sour, they persuaded analysts to turn a blind eye to it.
One S&P analyst put it bluntly: "Let's hope we are all wealthy and retired by the time this house of cards falters."
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?