Fitch Regards Haircuts on Greek Debt as Default

By: Friday October 28, 2011 12:52 pm

The entire Eurozone crisis deal is predicated on the haircuts Greek creditors will take being voluntary. If the haircuts are seen as a default event, it would trigger certain credit default swaps, which since we actually don’t even know who holds what in that regard (!), would be wildly unpredictable and dangerous. So one of [...]

Moody’s Downgrades BofA, Other Banks

By: Wednesday September 21, 2011 1:14 pm

The market didn’t like the Federal Reserve’s “Operation Twist” plan. I don’t quite know what else they were expecting, but the market fell pretty hard on the news. Long-term Treasuries were down and short-term yields were up, which is precisely what Operation Twist is meant to achieve. Now we’ll see if it translates into any [...]

Franken: Rating Agencies “Fundamentally Flawed,” Operating Same As Before the Crisis

By: Thursday September 1, 2011 10:59 am

When Dodd-Frank passed, I said that the legislation was not a bill but a plan to write a bill later. Dodd-Frank had dozens of studies and rules that would be written and implemented by regulators. The legislation would offer a rough guideline, but ultimately it would be up to the regulators to actually determine whether [...]

S&P Still Rating Subprime Crap Triple-A

By: Wednesday August 31, 2011 1:33 pm

This is pretty funny. So Standard and Poor’s showed how rigidly they look at the bare facts when they downgraded US credit. Ten-year Treasury bonds have been dropping ever since. But S&P isn’t so concerned about every financial instrument that they are unwilling to dole out triple-A ratings on occasion. Like, for example, subprime mortgage [...]

Other Rating Agencies Implicated in DoJ Mortgage Bond Probe

By: Friday August 19, 2011 10:10 am

It turns out that the Justice Department is not only concerned with Standard and Poor’s but the entire credit rating agency industry, it appears. The reported investigation into the ratings of mortgage backed securities during the housing bubble is centered on S&P, but not limited to them: The probe by lawyers in the Justice Department’s [...]

DoJ, SEC Both Investigating S&P Over Ratings of Mortgage Backed Securities

By: Thursday August 18, 2011 7:11 am

Louise Story scoops that S&P is under DoJ scrutiny for their manipulation of the ratings process during the housing bubble. The Justice Department is investigating whether the nation’s largest credit ratings agency, Standard & Poor’s, improperly rated dozens of mortgage securities in the years leading up to the financial crisis, according to two people interviewed [...]

US Debt Downgrades as Revenge for Dodd-Frank?

By: Wednesday August 10, 2011 12:12 pm

Standard and Poor’s has a bad track record in rating securities. Sometimes they even screw up on basic math, as they did with their $2 trillion error in downgrading US debt. They apparently don’t want anyone to know about that. Standard & Poor’s, whose unprecedented downgrade of U.S. debt triggered a worldwide stocks sell-off, is [...]

Standard and Poor’s Political Advocacy, Potential Selective Leaking Questioned

By: Tuesday August 9, 2011 9:35 am

There’s a small bit of solace in the face that the president of Standard and Poor’s had to go out and defend his company from the charge that their downgrade of US debt was politically motivated. Standard & Poor’s president defended his company’s downgrade of the U.S. triple-A credit rating, saying S&P had no political [...]

S&P’s History of Relentless Political Advocacy

By: Monday August 8, 2011 6:10 am

I was tied up with other matters this weekend, so couldn’t offer a take on S&P’s downgrade decision. Jane has done most of the spade work here. But I wanted to make a few points. First of all, if the rating agency’s entire argument was that the political system showed itself to be “less stable, [...]

US Political System Gets Downgraded, Failure to Deal With Economy the Reason

By: Wednesday August 3, 2011 6:50 am

Moody’s has joined Fitch in declining to downgrade the US credit rating after passage of the debt limit deal, though they still have the US on a negative outlook. This means Standard and Poor’s can play their little game and it won’t functionally matter, because the other two agencies still have the US at triple-A. [...]

Standard and Poor’s Has Less Leverage Than the Political Class Thinks

By: Thursday July 28, 2011 6:22 am

Standard and Poor’s rogue actions violate the Securities and Exchange Act, by giving the impression to the political class that they must reduce the deficit by $4 trillion in the next 90 days to avoid a credit downgrade (S&P, mindful of this violation, is now saying that they’ve been misquoted). But would that avoidance be [...]

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