Well now. The US Senate is about to disclose e-mail evidence showing that "executives from Standard & Poor's and Moody's Investors Service acknowledge compromising the integrity of ratings to win business from big Wall Street firms." And:
Another e-mail to be unveiled at Friday's hearing features a Standard & Poor's employee angrily complaining to a Morgan Stanley banker about ratings agencies being played off of each other.It's always nice to be vindicated (see below). Posted by Linkmeister at April 22, 2010 04:00 PM | TrackBack"How many millions does Morgan Stanley pay us in the greater scheme of things? How many times have I accommodated you on tight deals? Neer, Hill, Yoo, Garzia, Nager, May, Miteva, Benson, Erdman all think I am helpful, no?" the employee said, naming all the Morgan executives who'd received accommodative ratings.
I seem to recall an email from one broker to another during the Big Crash when the first guy said that a CDO could have been structured by a cow and they'd have sold it. Apparently as long as it was structured by the Merrill Lynch bull, Moody's and S&P would have rated it.
None of this is surprising. And yeah, it's nice to be vindicated, but wouldn't you rather have been wrong??
Posted by: hedera at April 22, 2010 08:32 PMSure. What I really don't understand is how the compensation scheme developed without the SIPC or the SEC ever saying "Wait, there's an inherent conflict of interest here. It has to be changed."
Posted by: Linkmeister at April 22, 2010 08:43 PM