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EYE-BALL on – The US Government seeks Payback against S&P downgrade

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Title:
The US Government seeks Payback against S&P downgrade …
Today’s ‘New York Times’ published a story on how the US Government is to commence investigating Standard and Poor’s (S&P’s)credit assessment of mortgage securities leading into the GFC.

Full Story linked here:

U.S. Inquiry Eyes S.&P. Ratings of Mortgages
By LOUISE STORY
Published: August 17, 2011

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 by the government and another briefed on such interviews.

The investigation began before Standard & Poor’s cut the United States’ AAA credit rating this month, but it is likely to add fuel to the political firestorm that has surrounded that action. Lawmakers and some administration officials have since questioned the agency’s secretive process, its credibility and the competence of its analysts, claiming to have found an error in its debt calculations.

In the mortgage inquiry, the Justice Department has been asking about instances in which the company’s analysts wanted to award lower ratings on mortgage bonds but may have been overruled by other S.& P. business managers, according to the people with knowledge of the interviews. If the government finds enough evidence to support such a case, which is likely to be a civil case, it could undercut S.& P.’s longstanding claim that its analysts act independently from business concerns.

It is unclear if the Justice Department investigation involves the other two ratings agencies, Moody’s and Fitch, or only S.& P. … [continues]

Anyone who does not see through this as a ‘payback’ for the US Debt AAA downgrade does not understand the way revenge works –

The Credit Ratings agencies were all found to be exposed as having ‘conflicts of interest’ during the GFC over giving the ‘sub-prime’ mortgages a AAA credit rating – investigations have exposed there were obvious flaws in their procedural and assessment of those securities.

As this new investigation relates to the current US Debt downgrade – other Ratings agencies have not endorsed S&P’s recent downgrade – this leaves S&P’s somewhat exposed and the US Government is attempting to seize the opportunity to hang then and discredit them.

This is a serious development and could easily backfire on the US Government – if they can call into question the motives of an Internationally relied upon Credit Rating agency – it will damage credit agencies and the work they do.

It also goes to the current inward thinking of the US Political and Regulatory authorities – this is not about fixing the US Debt problem or Politicians trying to find a solution to their financial problems – it’s about a blame game mentality and in that conundrum – the confidence of the people is fast eroding – the sharp sell-off overnight across Europe and the US – only confirms again how markets are quick to judge.

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The EYE-BALL Opinion …

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  1. Ghost of yoda
    August 19, 2011 at 12:01 pm

    your points are valid and logical.

  2. HissyFit
    August 19, 2011 at 12:30 pm

    The EYE-BALL Opinion seems to always be ahead of the curve in the subjects blogged about – I enjoy the site and the diversity – please keep up the good work …

  3. Cowboy
    August 19, 2011 at 2:14 pm

    Ghost of Yoda #1 – in so few words you manage to sound like a school teacher marking a high school paper. As Cowboys go short and sweet is always a dish well received,

    Most of what you contribute to any of the posts at this site has that condesending tone and it is about time someone pulled you up on it.

    Now if you perform to form you will give this post a serve as you always do when someone takes you to task.

    In future commentary keeping your responses short will do so much to fix your image. Your comments on this post are correct, it was a good post and the points EYE-BALL made were very apt.

    Why don’t you just say ‘great post’ or ‘I agree’ and be done with it. Why make it sould as if your opinion matters, or that you approve of the opinion.

    Cowboy … (Texas – USA)

  4. BuddaBalls
    August 19, 2011 at 2:29 pm

    Everybody seems to be picking on Ghost of Yoda – is he really the banned YODA of a few months ago – reincarnated?

    I agree – the short comments are welcome.

    I also agree with EYEBALL’s comments about the revenge motives of the US Government – how accurate they are will only be shown in time.

    This site offers contrary commentary and its appreciated.

    BuddaBalls.

  5. Ghost of yoda
    August 19, 2011 at 2:49 pm

    Your name implies something in itself. You are I suspect a fan of John Wayne movies and have a great deal of problem in identifying yourself as a hero,unfortuinately this has not , made it easy for you..I suspect that you are a stay at home type living on a pension, probably disabled, feeling sorry for yourself, reflecting on past failures..
    You substitute by going on to blog sites and casting your own review, which is equally condescending as my “school paper marking”. You see at another time Eye Ball was a pupil of mine and I know he looks for constant affirmation. Unfortunately he is going through a particular identity problem that stems from a fantasy existence he once had.
    You are very astute in recognising the approval aspects of the comments, but in turn you miss the point…..every one needs affirmation….unless of course they think they are John Wayne…which is an automatic acceptance of not requiring it…..but most certainly needing it.
    I hope I met all your needs in my reply that I understand you looked forward to immensley..

  6. Ghost of yoda
    August 19, 2011 at 2:59 pm

    Doh..!………………… is he really the banned Yoda.
    What do you think ” f…k knuckle? Maybe its his alter ego….son of Oddball! or could it be secretly. Darth Vader, Yoda’s arch eneemee.
    How come some one as smart as you blogs on this site? You have a future in politics!

  7. Firecracker
    August 19, 2011 at 5:52 pm

    There are many readers of this site who chose not to comment yet enjoy the read for what it is.

    But the Ghost of Yoda is a scurge on everything. He’s like a wind up Snoopy, drags his ball and ball home when the teacher yells him he’s been a naughty boy.

    Firecracker

  8. Lucifer the Beautiful
    August 19, 2011 at 6:01 pm

    What the fu_k would anyone know? It’s just one big game and we’re all at the bottom of the totem pole.

    There is evil everywhere and to think otherwise makes you a dumbass. Prepare for the future, you are all about to meet your maker.

    Lucifer

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