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Moody’s and their Ratings-Black Box Warnings?
Posted: February 4, 2008 at 3:58 pm by Chuck
The Wall Street Journal reports that Moody’s will consider changes in structured finance ratings. They are "considering a range of changes in the way it rates thousands of mortgage-related bonds and other vehicles hit hard in the credit crunch, including new warning-like labels that underscore the limitations of the rating."
Warning labels for ratings?! What’s next?
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Moody’s and Standard and Poors made BILLIONS, and should be taken to court. How could a triple A rating become junk overnight? It certainly makes me wonder about prospectus reading and research and of course greed. Any idiot would anticipate a huge risk regarding subprime mortgages, no down payment, no income or employment check, no credit history check, no nothing! Would I lend money to someone like that. NO! Not even to a friend! Look at the turmoil they are causing the country and overseas.
I have no doubt that lawsuits will abound in the near future. Moody’s, Fitch and S&P have been downgrading things right and left today.