Zero Credibility

Part of me believes the gross dysfunction of our Tea Party congress does actually warrant closer scrutiny by our banking overlords, but with that said, things like this make it increasingly difficult to take Standards & Poor’s seriously.

Influential investors are scratching their heads over a little-noticed development: After downgrading the country’s credit rating, Standard & Poors is continuing to award AAA status to the same class of assets that nearly blew up the world economy three years ago.

From Bloomberg: “S&P is poised to provide AAA grades to 59 percent of Springleaf Mortgage Loan Trust 2011-1, a set of bonds tied to $497 million lent to homeowners with below-average credit scores and almost no equity in their properties.”

In other words: U.S. Treasuries — widely believed to be the safest investment in the world — don’t make the cut, but subprime mortgage investments do? What gives?

Sub-prime mortgage-backed securities are the single biggest, but not the only, reason we are currently in economic dire straits, and S&P is rating them higher than U.S. government bonds.

I think they need to do a little house-cleaning in the offices of S&P, as labeling the company as grossly-mismanaged would seem to be an understatement.

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  • mrbrink

    The way I see it, someone, or something, big, had to say something about GOPTeaParty policies and methods. It was probably a conspiracy, too, between all the ratings agencies, as well as the majorities of their respective boards to step back when S&P stepped forward.

    They’re destructive lunatics with no demonstrative aptitude or temperament for a position of mass authority.

    You could say that the “free market” spoke, perhaps out of turn, but someone had to say something.

    But, I’m in. I vote for indiscriminate liquidation of all credit ratings agencies!

    The mark of the beast!!!

    • muselet

      I’m in.

      (Sorry, I missed the memo. Was I supposed to bring the pitchforks or the tumbrel?)

      –alopecia

      • mrbrink

        Ha ha. It tickles.

        We went over this in my delusions of grandeur.

        You’re bringing the snacks and tasteful theme music, I think.

        • muselet

          Oh, crap. Tasteful theme music? David Hasselhoff will be so disappointed …

          –alopecia

          • mrbrink

            Oh yeah. I forgot about Hasselhoff. I don’t have the heart to tell him we’re thinking of going with a fat beat gangster rap version of John Ashcroft’s, “Let the eagle soar.”

            “Let the eagle soar, from slave ships to Four score.

            “Let the eagle soar from corporate boards to the white man’s prison floors.

            “Let the eagle soar, you’re in the terrordome, bitches, right wing whores, il-gotten capital gains, critical downgrades, the poor and the democratic working force have come to claim their riches…”

            What’s that singing novelty bass doing these days?

          • muselet

            Works for me, but we are going to lose the deposit for the oom-pah band.

            –alopecia

          • mrbrink

            This isn’t going well so far and it’s going stupendously!

            I speak and can translate broken english and oom-pah band!

            They’ll do it for the music of the bell, bless em’.

            Galactic peace is nearing!

  • mhr6

    And we all know who incentivized the banks to give out subprime mortgages

    • muselet

      (Actually, I am sure.)

      –alopecia

    • mrbrink

      Yeah. The big banks.

      This has been well documented.

      The banks were under no pressure from anything but themselves to bundle shitty mortgages and sell them off to other banks and suckers while betting against them at AAA odds.

      Fannie and Freddie did not incentivize the mortgage crisis and the collapse of the global economy.

      CEO bonuses are holding that smoking gun.

      • 374elocin

        Wrong. It was Clinton and Bawney Fwank and the other goons in Congress who wanted their irresponsible and poor constituents to have a house they couldnt afford. They created laws that would enable Fannie Mae and Freddie Mac to back all the loans as a last resort and we all know what happened.

        And Krugman was the cheerleader during the whole thing.

        • ranger11

          Whatever…..