Comment by vlovich123
6 months ago
I mean they they were bribing/manipulating/forcing the ratings agencies to misclassify derivatives. That’s basically stealing except with more steps.
6 months ago
I mean they they were bribing/manipulating/forcing the ratings agencies to misclassify derivatives. That’s basically stealing except with more steps.
They shopped around to different ratings agencies and only hired those that provided the better results.
You would need to classify everything from consumer reports to industry awards to not inviting influencers who give negative reviews to events as stealing as well.
Yeah, no. Credit agencies weren’t hapless victims of market forces.
> Another email between colleagues at Standard & Poor's written before the bubble burst, suggests awareness of what would happen to the securities they were giving top ratings to: "Rating agencies continue to create and [sic] even bigger monster--the CDO market. Let's hope we are all wealthy and retired by the time this house of cards falters."
They were willing participants precisely because they were making huge fees to look the other way.
> One study of "6,500 structured debt ratings" produced by Standard & Poor's, Moody's and Fitch, found ratings by agencies "biased in favour of issuer clients that provide the agencies with more rating business. This result points to a powerful conflict of interest, which goes beyond the occasional disagreement among employees."
These kinds of things are deals negotiated at the highest level of the companies involved. Credit agencies were paid to give the crime the banks were doing a veneer of respectability.
> These kinds of things are deals negotiated at the highest level of the companies involved
To me it just seems a more or less natural outcome of the major structural flaws in the whole business model. I’m not sure you need an explicit conspiracy for credit agencies to begin behaving in such a way that maximizes their revenue, it was mostly just a natural outcome of competition and extremely useless and inefficient regulation. If anyone deserves to go to prison it’s the people who were supposed to be regulating the banking industry.
Obviously the Federal government had zero interest in doing that but if they only went after the bankers it would have quickly become obvious that they are not the only ones to blame.
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Not outright bribes. Just the implicit knowledge among all parties that the rating agency that gives bad grades get fewer customers. Result is the same but not exactly "bribing".
Yea, probably there was invidual cases of bribing like in all industries. But overall the issue wasn't oughtright bribes.
It wasn’t just implicit. There was explicit acknowledgment of the problem and turning a blind eye precisely because they were getting paid by the banks. I don’t know how else to categorize that except as bribery - you’re literally paying money to influence the outcome which is the very definition of bribery.
IIRC, SCOTUS recently ruled that only an explicit quid pro quo is considered a bribe. So laundering monies thru multiple parties is a-okay and mutual backscratching, such as a gifting someone an RV and then coincidentally getting preferential lucrative judgements, is reciprocal altruism. Or something. Because vibes.
I know, I know. Requiring conspirators to say "this is a bribe" for there to be legal jeopardy is sort of nuts.