Speaking of S&P, the New York Times reports that the Justice Department is investigating whether the agency “improperly rated dozens of mortgage securities in the years leading up to the financial crisis.”
(Before you think this is payback for S&P’s downgrade of the US credit rating, note that the investigation began before that happened.)
Quoth the Times:
[T]he 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.
In case you forgot the issue:
During the boom years, S.& P. and other ratings agencies reaped record profits as they bestowed their highest ratings on bundles of troubled mortgage loans, which made the mortgages appear less risky and thus more valuable. They failed to anticipate the deterioration that would come in the housing market and devastate the financial system.