The Obama Hypocrisy: US sues S&P over pre-crisis mortgage ratings

In charges filed late Monday in Los Angeles federal court, the Justice Department said S&P gave high marks to mortgage-backed securities that later went sour, even though it knew they were risky. The government said S&P misrepresented the risks because it wanted more business from the banks. The case is the government's first major action against one of the credit rating agencies that stamped their seals of approval on Wall Street's mortgage bundles. It marks a milestone for the Justice Department, which has been criticized for failing to make bigger cases against the companies involved in the crisis. "Put simply, this alleged conduct is egregious -- and it goes to the very heart of the recent financial crisis," Attorney General Eric Holder told a news conference Tuesday. He called the case "an important step forward in our ongoing efforts to investigate and punish the conduct that is believed to have contributed to the worst economic crisis in recent history.

That the structural flaws associated with bond ratings agencies, namely conflicts of interest, can be no surprise to anyone not living under a rock is certain. Other financial shenanigans equally egregious over the last two decades were much more covert. Whether the charges against S&P are some sort of payback for its downgrade of the US Treasury, more than possible given the Obama political machine...to quote Hillary, what does it matter. S&P is now getting charged essentially with making the right call? What's more disturbing is the same institution, the US government, is brining these charges. In the mid 90's our government decided it was constitutionally written that every person has a right to own a house. Aided by staunch community activism and a compliant financial system, these insane loans were pumped out ad infinitum. Backed by the full faith and credit of Fannie and Freddie, who were at the time deemed financially stable, loans were made and repackaged. S&P was part of the debacle no doubt. A piece of junk when combined with other pieces of junk is still a piece of junk. Never have I seen a better looking landfill because it was bigger and more "diversified". But the root cause wasn't S&P, it was the US Government!

Duh, in July, 2008 US Senator Crissy Dodd stated that all way just fine in the US Regulated Housing Market.

Double Duh, what Federal Bank Regulators has been sacked so far for THEIR dereliction of duty?

Maybe what we need is a Class-Action suit against “Sub-Prime Barney and his pal Dodd?

BTW, will the US Housing Recession of September, 2008 become know as the Fannie Bubble?

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