AUGUST 19, 2011
BRUCE A. BRENNAN BLOG FROM THE WORLD AND MY MIND
The news as I see it and the views as I want them.
August 19 is … Potato Day
August 19 is … Potato Day
This spuds for you!
It is not nice to screw with Mother Nature. Standard & Poor’s is about to learn this first hand.
The Justice Department is investigating whether the Standard & Poor's credit ratings agency improperly rated dozens of mortgage securities in the years leading up to the financial crisis, The New York Times reported Wednesday.
The investigation began before Standard & Poor's cut the United States' AAA credit rating this month, but it's likely to add to the political firestorm created by the downgrade, the newspaper said. Some government officials have since questioned the agency's secretive process, its credibility and the competence of its analysts, claiming to have found an error in its debt calculations.
The Times cites two people interviewed by the government and another briefed on such interviews as its sources. According to people with knowledge of the interviews, the Justice Department has been asking about instances in which the company's analysts wanted to award lower ratings on mortgage bonds but may have been overruled by other S&P business managers.
If the government finds enough evidence to support a case, it could undercut S&P's longstanding claim that its analysts act independently from business concerns. The newspaper said it was unclear whether the Justice Department investigation involves the other two major ratings agencies, Moody's and Fitch, or only S&P.
S&P and other ratings agencies reaped record profits as they bestowed their highest ratings on bundles of troubled mortgage loans, which made the mortgages appear less risky and thus more valuable. They failed to anticipate the deterioration that would come in the housing market and devastate the financial system.
Companies and some countries -- but not the United States -- pay the credit ratings agencies to receive a rating, the financial market's version of a seal of approval. Before the financial crisis, banks shopped around to make sure rating agencies would award favorable ratings before agreeing to work with them. These banks paid as much as $100,000 for ratings on mortgage bond deals, according to the Financial Crisis Inquiry Commission, the Times said.
Critics say this business model is riddled with conflicts of interest since ratings agencies might make their grades more positive to please their customers.
The Times said the Securities and Exchange Commission also has been investigating possible wrongdoing at S&P, citing a person interviewed on that matter.
Ed Sweeney, a spokesman for S&P, said in an email to the Times: "S&P has received several requests from different government agencies over the last few years. We continue to cooperate with these requests. We do not prevent such agencies from speaking with current or former employees."
Representatives of the Justice Department and the SEC declined to comment on whether they are investigating the ratings agencies, the newspaper said.
I wonder if this guy is a Democrat or just doesn’t understand his job. I assume he is about to be unemployed.
From AP, a Secret Service agent on assignment in Iowa to help with presidential security has been arrested on suspicion of driving under the influence. City Police Chief Bill Nixon says 40-year-old Daniel L. Valencia was off duty when he was arrested Saturday in Decorah. Decorah is the city that hosted the eagle cam this past late winter, spring and summer. President Barack Obama visited the northeast Iowa city on Monday as part of his three-day Midwestern bus trip.
Nixon says the arresting officer suspected Valencia had been drinking but that no vehicles were involved in an accident. He declined further comment Wednesday.
Secret Service spokesman George Ogilvee confirmed that Valencia is an agent and that the matter had been turned over to the agency's Office of Professional Responsibility. Ogilvee would not comment further. Online court records don't list an attorney for Valencia.
Just a couple of thoughts I had and you should too or at least think about.
BRUCE A. BRENNAN
DEKALB, IL 60115
COPYRIGHT 2011
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Email: brucebrennanlaw@aol.com
Go to web sites below to buy books by Bruce A. Brennan. It is still a good time to purchase any of my books. The books are interesting and inexpensive reads. My third book should be available later this year, in late 2011. More information will be forthcoming.
www.ebookmall.com (Do search by my name or book Title)
www.barnesandnoble.com (do a quick search, Title, my name)
www.smashwords.com Do a Title or author search.
Book Titles:
Holmes the Ripper
A Revengeful Mix of Short Fiction
"A guilty conscience needs to confess. A work of art is a confession." - Albert Camus
