The Last Mystery of the Financial Crisis

The Last Mystery of the Financial Crisis

What about the ratings agencies?

That's what "they" always say about the financial crisis and the teeming rat's nest of corruption it left behind. Everybody else got plenty of blame: the greed-fattened banks, the sleeping regulators, the unscrupulous mortgage hucksters like spray-tanned Countrywide ex-CEO Angelo Mozilo.

But what about the ratings agencies? Isn't it true that almost none of the fraud that's swallowed Wall Street in the past decade could have taken place without companies like Moody's and Standard & Poor's rubber-stamping it? Aren't they guilty, too?

Man, are they ever. And a lot more than even the least generous of us suspected.

Thanks to a mountain of evidence gathered for a pair of major lawsuits, documents that for the most part have never been seen by the general public, we now know that the nation's two top ratings companies, Moody's and S&P, have for many years been shameless tools for the banks, willing to give just about anything a high rating in exchange for cash.

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Now is anyone surprised? Seems to me that every part of the financial market is corrupt. From the politicians who make the laws all the way to the ones who are supposed to be trusted to rate credit worthiness. Wonder why no one has gone to jail and with all these fraudulent practices have cost everyone - they are still getting millions in bonuses while the rest of us try to make it through the day.

and the kicker, nothing has really changed from 2008

Corruption list:

Hedge funds
Wallstreet
Banks
Lenders
Congress (Legislative Branch)
Executive Branch
Judicial Branch
Libor
Big Corporations
Ratings Agencies


Go ahead and add to this list. I know I've left out a lot. This list could become quite long.

The ratings agencies call it as they see it. What would you rather them do, lie?

Some of them do. They bolster good credit to countries that is obvious that things are looking terrible.

I've watched the past couple of years as the ratings agencies lowered multiple countries, and the most that it did to the stock market was provide a few down days that quickly recovered. I'd say that they are the least of our worries.

Originally posted by TheNewRevolution
The ratings agencies call it as they see it. What would you rather them do, lie?

Some of them do. They bolster good credit to countries that is obvious that things are looking terrible.

I've watched the past couple of years as the ratings agencies lowered multiple countries, and the most that it did to the stock market was provide a few down days that quickly recovered. I'd say that they are the least of our worries.

Uhmm they rated US garbage house loans AAA and lots of banks bought them causing many banks to basicly collapse and trigger the global recession.
Then they lowered many eu country's when their banks had to be saved (who had those worthless crap) causing the interest rates from those country's to 10% or more. Setting in a domino effect.
They had that effect, right?
Imagine that the US right now has to pay 10% or more interest on their 16 trillion debt with an income of about 2 trillion/year.

Those rating agency's rate basicly every company in the world! as if that's really possible? But you right by time they get less important or believable.

You could say they worked in US interest and when it went bad in Europe, the rating for US debt loans went down, not saying this was their goal, but who knows.
They surely wouldt do stuff that would be of interest of Europe I think but they rate basicly the whole world.

What's amazing about this is that even without a mass of ugly documentary evidence proving their incompetence and corruption, these firms ought to be out of business. Even if they just accidentally sucked this badly, that should be enough to persuade the markets to look to a different model, different companies, different ratings methodologies.

But we know now that it was no accident. What happened to the ratings agencies during the financial crisis, and what is likely still happening within their walls, is a phenomenon as old as business itself. Given a choice between money and integrity, they took the money. Which wouldn't be quite so bad if they weren't in the integrity business.

When will people ever wake up and realize the banking industry as a whole is entirely corrupt and screwing us all? If I had a business and screwed up this badly, I'd be hurting in a number of ways, most likely including prison time, yet nothing ever happens to these fraudsters.

I really, really hate this world we live in. Corruption everywhere, corporations, governments, bankers, all the elite are corrupt and selling us down a dry river. Where is the humanity of these people? How they can do this, not unlike pigs/soldiers that fire on unarmed, non-violent protesters, astounds me immensely.

reply to post by MidnightTide


London is the worlds financial capital, does that make them the most corrupt?