Didn't we go through something similar back when Enron went down? It was Arthur Andersen that got it back then.
With evidence such as the instant messages between two S&P analysts being made public over the last couple of months ("I know, right. The model definitely doesn’t capture half the risk."; "We rate every deal. It could be structured by cows and we would rate it."), it seems that some of this rating agencies will lose their credibility and go the way of good ol' Arthur Andersen.
My favorite part of the hearing is the following:
Devan Sharma, president of S&P, said in a written statement, “It is by now clear that a number of the assumptions we used in preparing our ratings on mortgage-backed securities issued between the last quarter of 2005 and the middle of 2007 did not work.”
...really Devan, really? All that's left to say is..No shit Sherlock.
About f'in time.
http://paul.kedrosky.com/archives/2008/10/22/omg_cows_kewl.html
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