Paul Kedrosky at
InfectiousGreed awards the Quote of the Day
S&P said Lehman has a stable base of funding and strong fundamentals, but "could suffer severely if there was an adverse change in market perceptions, however ill-founded." (S&P via Reuters)
Paul adds:
"Right. Like, for example, if there was a new S&P credit downgrade report warning investors that things at Lehman could get bad if there was a change in market perceptions? I get it."
I figure S&P would just like to be able to say they issued a warning about something before it fell apart even if they don't think it is going to happen. I find it hard to believe the rating agencies are even still in business. They have zero credibility now.
2 comments:
Though I don't use these services for either, I've always thought that these ratings were used more for debt. Though its really two sides of the same card, do you think that they still hold a place here? To me, it seems that rating debt may be a little more scientific.
Rating debt is precisely where S&P and Moody's and others failed so badly. They were content to take their payment and failed to actually do any evaluation of the subprime component of securities they were rating AAA. The lynchpin of the entire charade was the AAA ratings that made it ok for institutions to invest in this toxic paper. frankly, I cannot believe thay haven't been sued yet.
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