Raters had qualms over deals by Goldman, others

Source: Reuters

... The U.S. Senate Permanent Subcommittee on Investigations found that Wall Street influence and an insatiable thirst for profits drove credit raters to inflate ratings on subprime mortgage-related products, contributing to the financial crisis that led to a massive destruction of wealth.

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"The credit rating agencies allowed Wall Street to impact their analysis, their independence and their reputation for reliability," Senator Carl Levin, chairman of the Senate investigations subcommittee, told reporters on Thursday. "They did it for the big fees that they got."

Excerpts from emails uncovered by the subcommittee, made available on Thursday, shed light on how underwriters like Goldman influenced the agencies' decisions. "I am getting serious pushback from Goldman on a deal that they want to go to market with today," said a Moody's internal email from April 2006. Another email, from S&P and dated May 2006, referred to a flaw "in pretty much all Abacus trades," although the nature of the flaw was not disclosed.

The SEC alleges Goldman did not tell investors "vital information" about an Abacus product created with input from Paulson & Co, a major hedge fund, which then shorted the product...

Read more: http://www.reuters.com/article/idCNN2213095120100423?rpc=44

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The subcommittee will take testimony on Friday from current and former officials of Standard & Poor's and Moody's Corp (MCO.N), the two biggest rating agencies. S&P is a unit of McGraw-Hill Cos Inc (MHP.N).

and experience the unemployment that would follow...

Could you post this one, too, please Ghost Dog?