U.S. probes S&P, Moody's over financial crisis: sources

S&P are as crooked as an old knarly arthritic finger.

If their mortgage ratings as the bubble was bursting were not fraudulent then their current ratings are meaningless.

Anyone can get a triple A rating for the right price.

What a scam.

The US government investigating the S&P right after they downgraded the US’s credit rating? Hmmmm….I guess Washington is upset and this is the only way they can try and get back at S&P for not caving like Moody’s did.

what troubling me is why US government wait over 3 years to investigate S&P, why didn’t do that before? and why they are doing investigation on S&P after S&P downgrade US?
Obama government is using intermediate tactic. The whole situation makes me feel more that this administration can’t be trusted, period.

Global scam.

@OldCuban
I think you are right, but they also need to make an example of S&P to keep the other agencies to scared to talk.

I bet S$P reverses the downgrade decision with in 3 months.

So was this a case of if you investigate us we will downgrade you or a case of you downgraded us, you are under investigation?

It’s pretty clear. If you do not go along with the Obama Administration you will have the DOJ after you.

Why arn’t ratings a function of say the world bank ,IMF.or UN.this should be independent and not for profit funded from a transaction tax.

So…finally, we get around to looking into Wall Street.

I think you have something Gillyp! They should also be rated. With all the decades of failure with in these organizations, donations need a form of public gauge.

US Justice Department needs to investigate the House & the Senate to find out why they financially mismanaged America.

Half the people commenting here seem not to have read the article, it says…

“The investigation began before S&P, a unit of McGraw-Hill, downgraded the long-term U.S. debt from a AAA rating to AA-plus this month”

…so it wasn’t started because of the downgrading of the US

Don’t jump to conclusions which contradict the facts in front of you !

This is nothing new and has been going on for several years now. Its sad that the media doesn’t feel its news until they can print it at their convenience.

The paper quoted Ed Sweeney, a spokesman for S&P, in an e-mail that the agency had received several requests from different government agencies over the last few years and that it was cooperating with these requests.

Way to go Reuters what other old news are you holding on to?

Lets just face the facts; rating agencies have not served the purpose they were created for. The recent recession has proven that.

The investigation should have been started years ago, when sub-prime prime mortgages were given AAA ratings. The ratings agencies cannot be trusted ever again. It is obvious that their ratings have much more to do with their own profit than with the quality of financial investments. No settlement should be allowed that does not include jail time for the C-level officers of these organizations.

Now the US government wants to investigate how those CDO’s got AAA ratings?

The action is long overdue, but waiting until after the S&P downgrade makes it appear that there would otherwise have been no investigation.

I will call that government complicity until it is proven otherwise. Now it’s easy to see why the Department of Justice has so far not used RICO to seek real justice for financial system collapse of 2008.

I encourage those conducting the S&P investigation to knock on every suspicious door, particularly if the man behind the door works for the taxpayers or works for Wall Street.

Much of what is wrong with America’s economy right is often attributed to a “lack of confidence”. I submit that the reason Americans are wary of their future is the blatant failure of the American Department of Justice to deal with the the events leading up to 2008, looking the away rather than look into the eyes of the greatest financial fraud in world history.

RICO!

myweatherlab… read my comment above, this article is copied from the New York Times.

This is payback for the ratings cut – unless the investigation includes the other ratings forms which were also runner stamping mortgage securities as AAA even though they were filled with subprime garbage.

Never been much of a conspiracy fan, but if they are going after S&P, they better go look at ALL of the rating agencies.

You know… it says in the article that the investigation began before the downgrade…

No one will go to jail because the banks all know this is the death of capitalism, this death will not be investigated by the police or the coroner. The administration of justice also collapses as “Controls” in the finance sector ends. Now we have a free for all with the fed offering limitless paper as confetti at the party.

aa_inv

i bet you you trust karl rove or Michelle Bachman… rednecks love rednecks to trust… if S&P did assess the risks right there would not be this deep financial crisis… this is not related to a revenge issue…

by the way your hero george w bush got $300B budget surplus in 2000 and ended with $1.4 trillion budget deficit in 2008… this economy messed up way before Obama… also national debt increased around $5-6 trillion dollars in 8 years (2000-2008)… you can not have 2 wars and tax cuts… if you do that even praying god in masses will not save you… (new government policy by Perry… pray in masses for problems that can be solved without divine intervention)

this country needs to move away from radical left wing and right wing nut jobs and create a fiscal plan to tame our budget deficit…

Vindictive. However, while the DOJ is at it include Fannie Mae and Freddie Mack and their enablers.

As long as ratings agencies can’t be sued for manipulating and selling — at very high prices — advice tailored to their customers’ most optimistic wants rather than the truth, they should be ignored.
As for those corporations buying the advice, these companies should be sued for buying and reselling knowingly flawed data to investors: Knowingly because rating agencies have an incredibly poor record of accuracy.

Dear S&P,
The government does not take to kindly to your telling the truth.
yours truly,
Kept in the dark citizen.

@OldCuban and Sinbad1 and so many others here… perhaps don’t comment if you haven’t been paying attention…

The S&P investigations had been coming to a head and S$P had been lobbying to weaken the new legislation well BEFORE they downgraded the US. If anything, it was a display of power meant to hold a hammer over the US.

Only S&P, why not the other rating agencies? Oh yeah, they didn’t down grade the US credit rating.

So what if the investigation began some time ago. I am sure the other rating agencies were investigated also. With the same rating history, why is the S&P the only one?

“What troubling me is why US government wait over 3 years to investigate S&P, why didn’t do that before?”

S&P is being investigated now because the AA+ drop pissed off the government enough to do something about it. So, apparently, a financial collapse isn’t enough to tick off the gov’t.

How much confidence can one have in the government investigating wrongdoing?

According to Darcy Flynn who recently came forward to Congress, the SEC has destroyed 18,000 records of investigations, whitewashing the files of some of the nation’s worst financial criminals.

http://www.rollingstone.com/politics/news/is-the-sec-covering-up-wall-street-crimes-20110817

According to Harry Markopolos, the fraud examiner famous for breaking the Madoff case. “The reason you would want to keep them (records) is to build a pattern. That way, if you get five Matters Under Inquiry (MUIs) over a period of 20 years on something similar involving the same company, you should be able to connect five dots and say, ‘You know, I’ve had five MUIs – they’re probably doing something. Let’s go tear the place apart.’” Destroy the MUIs, and Wall Street banks can commit the exact same crime over and over, without anyone ever knowing.

“There’s no mechanism to raise these issues at the SEC,” says another former whistleblower. Contacting the agency’s inspector general… is considered ‘the nuclear option’ – a move ‘well-known to be a career-killer.’”

@KyuuAL try to stay up to date. The investigation was coming to a head. Holding that S&P rating over the Government’s heads to quash the investigation is more like it! The reduced rating was a show of power…

Being S&P is not supposed to be for hire by Governments, yet is “for hire” the questions might be who was paying them to do a downgrade and get involved when they were not involved in the past when the debt ceiling rose exponentially? Why did they intervene when investigations into their part of grading toxic CDOs AAA were coming to a head? Why has S&P been lobbying so fiercely for less regulation?

Attorney General Eric Holder should be investigated and impeached. He’s using his office as a political stick to investigate anyone who questions the economic conduct of the administration.

It’s too late. If Holder had any questions about Standard and Poor’s judgments in 2008. He should have attacked them when the Democrats in congress attacked Moody’s in 2009. Standard and Poor testified to congress. Holder should read the transcript if he wants to know about their conduct.

I’m sure that he knows of the first amendment of the US Constitution. He just doesn’t want to uphold it. Impeach Holder for harassment of the media!!

Mr Butch from PA,

If Standard and Poor is crooked, why have people relied upon them for the truth about financial institutions since 1860, for over 150 years?

Does your comment makes sense?

Scapegoating, pure and simple. The investigations into the junk bonds grading has been ongoing since ’09, and the fact that this release focuses on S&P relates directly to the fact that the one agency willing to clean up its act enough to call things straight had the balls and honesty to downgrade the U.S. Which it should have. More politics is all it is, which does nothing but confirm S&P’s downgrade.

Ed Sweeney, a spokesman for S&P, said that its core principles had included “analytic independence and objectivity” and that since 2008 the firm had taken steps to enhance those policies.
That sounds like they weren’t ethical before 2008. Look the whole industry participated in this scam because they lost all their money in the dot-com bubble. They just played it out til it couldn’t stand anymore, then wham. The rest is history.

Typical Obama Administration response to bad news … shoot the messenger.

What took so long.

People keep up. The Financial Crisis Inquiry Commission reported in January 2011 that: “The three credit rating agencies were key enablers of the financial meltdown.” As I recall the finger was pointed at them when this began. What I see is a stack of BB’s and nobody wants to be the one to bump the table. The last depression started with a run on banks. This one will hit when the market finally panics and everybody tries to get out at once. This is inevitable as the top of the pyramid has been reached. There are no more ways to create wealth from nothing. It is not to late to pull out and by real gold. Don’t know how you will spend bars of it but in the last depression a silver dollar bought a weeks worth of food. Living in the city is going to really suck someday soon.

All parties to the financial crisis should be probed. This should include every government GSE, Congress, appraisers . . . and the public who acquired mortgages that they couldn’t afford.

Our federal government has a penchant for ‘pinning the tail’ on the donkey . . . when in fact . . . they are often the initiators of poor public policies . . . which all too often are legislated in order to keep them in power and control