Credit Rating Agencies Triggered Financial Crisis, U.S. Congressional Report Finds

[sasha031]

WASHINGTON (Reuters) - Moody's Corp and Standard and Poor's triggered the worst financial crisis in decades when they were forced to downgrade the inflated ratings they slapped on complex mortgage-backed securities, a U.S. congressional report concluded on Wednesday.

In one of the most stark condemnations of the credit rating agencies, a Senate investigations panel said the agencies continued to give top ratings to mortgage-backed securities months after the housing market started to collapse.


The agencies then unleashed on the financial system a flood of downgrades in July 2007, the panel said.

``Perhaps more than any other single event, the sudden mass downgrades of (residential mortgage-backed securities) and (collateralized debt obligation) ratings were the immediate trigger for the financial crisis,'' the staff for Senators Carl Levin and Tom Coburn wrote in their report.


http://www.huffingtonpost.com/2011/04/13/credit-rating-agencies-triggered-crisis-report_n_848944.html

[DCKit]

1. The problem began when they gave those craptastic, bullshit, imaginary investment vehicles...

AAA ratings. Not when they got all honest.

[Rex]

2. So they fixed prices to help benefit stock holders?

Then later shit on homeowners? That about right?

[Canuckistanian]

3. And the indictments start when?

I must have missed that part of the recommendations.

[rufus dog]

4. So the agencies that have ratings oversight on US bonds

can manipulate the market at best case. They could also leverage the elected government!

[Amonester]

5. So? (When will these bandits be served True Justice?)

crickets (I guess... as usual.)