In the history of mankind, many republics have risen, have flourished for a less or greater time, and then have fallen because their citizens lost the power of governing themselves and thereby of governing their state. TR


Is S&P Getting the Chicago Treatment?

That’s what the Wall Street Journal wants to know. And me too.

As you may be aware, the Justice Department is suing Standard & Poor’s to the tune of $5 billion for giving all those nice ratings to banks’ subprime mortgage-backed securities even while the market began to fall apart – as homeowners figured out they should have rented, bought cheaper homes, or moved in with their parents.

I have no issue with, at the very least, an investigation of these ratings agencies, which profited handsomely from their incestuous relationships from the very banks they were rating.

My problem is not that the government is suing S&P. My problem is that it is not suing Moody’s and Fitch.

Because you see, happens that, of the three credit rating agencies, ONLY S&P INJECTED A NOTE OF HONESTY INTO GOVERNMENT ACCOUNTING by downgrading the federal government’s credit rating last year.

The Journal writes:

So why wasn’t a federal case made in 2008 or 2009 or 2010 or 2011 or 2012? . . .

S&P’s attorney Floyd Abrams tells us that “things seemed to rev up in terms of the intensity” of the federal investigation after S&P’s historic downgrade of United States credit following Washington’s debt-limit fight in 2011.

Meanwhile, a McClatchy Newspapers MNI -2.01% report says that it was around that time that Moody’s, which did not downgrade the government, was dropped from the federal investigation. Ask any investor and he’ll likely tell you that Moody’s was equally awful in forecasting the mortgage debacle.

Is this payback? Could it be? The Obama administration?

At the very least, with S&P in the sights of a $5 billion federal pistol, are they or any other credit agencies going to issue new downgrades of the government? I sure doubt it.

17 thoughts on “Is S&P Getting the Chicago Treatment?”

  1. This administration has no integrity. This reminds me of when they sued the State of Florida for trying to get dead people and illegals off the voter registration rolls. The suit was thrown out and I imagine this one will be also. Holder is a thug. Ditto what Aileen said, keep their feet to the fire, Keith.

  2. What immediately struck me as laughable is that instead of the Obama administration addressing the debt and deficit problem we so obviously have they’d rather sue the messenger, S&P, as if the problem isn’t really the debt and deficit but the fact that S&P was brazen enough to downgrade the U.S.’s credit rating. Sure S&P blew the call on questionable securities, but the government isn’t exactly innocent of the housing collapse. Did S&P put a gun to the heads of banks and lending institutions to lend to people without the means to fulfill their obligations?

    This is how Obama and his evilly cynical administration rolls: blame the messenger, blame the gun, blame republicans, blame George Bush, blame the rich, blame the American people, blame blame blame.

  3. The first downgrade of the US was not the historic moment that MrObama was hoping for from S&P. Reward Your Friends and Punish Your Enemies comes to mind here.
    For once, the DOJ isn’t suing Arizona for a change, so S&P can fend for themseles.

    We all have sympathy for those who have lost their houses, butt since most of them were buying imposssible dream homes they knew they couldn’t afford, it’s certainly not S&P’s fault. Frank/Dodd comes to mind.

  4. Pingback: Classic Example Of Obama’s Chicago Thug Politics… - The Ulsterman Report

  5. I think we should take the H.G. Well’s time machine back in history to 1994 when times were good and the ACORN agitator was just getting started. Why, if then president Clinton hadn’t kicked the Community Reinvestment Act into gear by forcing banks to make loans to people who could never repay them, the future Preezy Revenge wouldn’t have sued Citibank for “redlining”, and the sub-prime mortgage fiasco would have never happened.

    Nah, instead of learning from their mistakes, and fixing the source of the problem (Community Reinvestment Act) the Marxist takes revenge on his former partners in crime by suing them. Ain’t tyranny grand?

  6. Is the administration going sue Bawney Fwank too?

    He clearly stated that there was absolutely nothing wrong with Fannie and Freddie. Lack of oversight doomed the agencies, NOT the credit rating companies.

  7. Well, according to Chris Rock Obama is our boss and also like our Dad and we should listen to him. Apparently Obama believes this as well. And he only takes out the belt when we really really need it.

    This is not a government. This is the Barack Obama slice and dice America Game Show. Winner take all.

  8. I am certain this all tracks back / forward to Benghazi. We just need to figure out how to connect the dots…

    If interested, this guy did a piece that is a simple read…

    The larger question, the government – to include this administration, just ain’t very good at rooting out this level of crime on a sustained basis… And, historically, they never have been. Even ole Teddy had some very real difficulty… And he owned guns and could shoot straight…

    In the final analysis, it may be as simple as sleeping with the enemy… One needs to be careful about publicly bitch-slapping the spoon that feeds ya… Just sayin’… Somehow, you get the feeling this was saved up for a Term II action. Moody’s will play and pay, as with Fitch.

    The aftermath? Who knows. I do know this. When you mess with Wall Street at this level, you are playing with folks that will quietly bury you – with no psychological need for a headline or taking credit. The most dangerous kind of folks, really…

    There will be blood shed. It just won’t be in the public eye…

    ~ RT

  9. Pingback: Payback, or Simply Bullying? | The D.C. Clothesline

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