Moody’s puts US credit rating on review, but had AAA and AA rating on $AIG and $LEH until collapse
- Posted by hcpg
- on July 13th, 2011
The Moody’s news this evening is hilariously ironic when framed against the the oh-so recent memory of their role in the 2007-2008 financial crisis. Their argument now is that if a deal is not made by August 02 to raise the debt ceiling it will consider a downgrade. Fine. So are they now turning over a strict new leaf post financial crisis debacle? A few quotes from from the 2009 Congressional hearings between Rep Jackie Speier and the Agency chiefs:
“You had rated AIG and Lehman Brothers as AAA, AA minutes before they were collapsing. After they did fail, did you take any action against those analysts who had rated them?” Speier asked. “Did you fire them? Did you suspend them? Did you take any actions against those who had put that kind of a remarkable grade on products that were junk?”
McDaniel answered first. “No, we did not fire any of the analysts involved in either AIG or Lehman,” he replied. “An important part of our analysis was based on a review of governmental support that had been applied to Bear Stearns earlier in the year.
Was there any real restructuring/change of the agencies post crisis? Not that we know of …and the modus operandi of privatizing profits and socializing losses lives on.
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