US credit rating agencies 'a colossal failure'

yep all available at

I think my two favourites items from the hearings were …an IM transcript and an email

IM conversation captured between 2 Moodys employees …Shannon Mooney & Rahul Dilip
RD :btw that deal is ridiculous
SM : I know right…model def does not capture half of the risk
RD : we should not be rating it
SM :we rate every deal
SM : it could be structured by cows and we would rate it
RD : but theres alot of risk associated with it…personally i dont feel comfy signing off as a committee member

And an email exchange between two S&P execs, just goes to show that there was internal friction over the shoddy methodology being
used to rate securities.
From Richard Gugliada
Any request for loan level tapes is TOTALLY UNREASONABLE!!!
Furtherrnore, by executtve committee mandate, fees are,not to get In the way of provìding, credit
estimates, we charge $5000 per estimate or cut bulk disoount offers where appropriate. lf lt
means losing the deal we’re autho¡ized to waive those fees altogether.
It is your responsibitity to provide those cred¡t estimates and your responsibilily to devise some
method for doing so. Please provide the credit esl¡mates requested!

To which the respondent Frank Raiter (former exec S&P) who subsequently refused to rate the security had a one line response…
‘This is the most amazing merno I have ever recelved in my buslness career’
Gugliada said in an interview that he was following company policy and that Raiter’s department was the only one that refused to provide ratings without the detailed data.

Seems he who shouts loudest gets to win. Reminds me of when Cowen verbally lambasted Richard Bruton before the General Election all the papers carried the story of how Cowen ran riot over the soft spoken Bruton, even though Bruton was talking the most sense. Ahh journalists could we have a more ignorant bunch of people voicing an opinion…
Twasnt just sub-prime mortgages and highly leveraged SFPs we got
we got sub-prime journalism , highly leveraged in Montrose bullshit
we got sub-prime architecture , highly leveraged in starchitect bullshit
etc etc… … 13242.html