Matt Taibbi places discredit where discredit's still quite overdue, squarely in the laps of the securities-ratings agencies, focusing upon Standard & Poor's and Moody's (the two largest in the sector), and their extremely material corruption and how that substantially contributed to Wall Street's downfall in 2008; all in his latest feature set to appear in the July 4th issue of Rolling Stone, entitled: "The Last Mystery of the Financial Crisis."
Citing the fraud-filled details of two, pathetic Structured Investment Vehicle ("SIV") securities issued by Morgan Stanley, "Cheyne" and "Rhinebridge," as prime examples of the rampant greed that created the societal mess that will take a generation for America to fix--if it ever does, and that IS highly questionable at this juncture--Taibbi takes us on another trademark, wild ride.
As Taibbi notes, it is regrettably far too typical of so many realities on Wall Street (and throughout our society), post-crash, as we learn from Senator Al Franken in this piece that abso-freakin'-lutely nothing has been accomplished to properly address this problem (even though Franken valiantly tried to do just that) inside the pathetically captured Beltway, ever since. Then again, as many misdirected souls in our country -- and even some at Daily Kos -- would ask these days: "What problem?"
The Last Mystery of the Financial Crisis(DISCLOSURE: Diarist does, and has done, extensive work in related fields in the real world--analytics, corporate/financial services media, technology, marketing, etc.--and has worked with Standard & Poor's, directly, and with Moody's consultants on many projects in decades past.)
It's long been suspected that ratings agencies like Moody's and Standard & Poor's helped trigger the meltdown. A new trove of embarrassing documents shows how they did it
By Matt Taibbi
June 19, 2013 9:00 AM ET
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.
In incriminating e-mail after incriminating e-mail, executives and analysts from these companies are caught admitting their entire business model is crooked.
"Lord help our fucking scam . . . this has to be the stupidest place I have worked at," writes one Standard & Poor's executive. "As you know, I had difficulties explaining 'HOW' we got to those numbers since there is no science behind it," confesses a high-ranking S&P analyst. "If we are just going to make it up in order to rate deals, then quants [quantitative analysts] are of precious little value," complains another senior S&P man. "Let's hope we are all wealthy and retired by the time this house of card[s] falters," ruminates one more...