A Rolling Stone article details how the ratings agencies supposed to watch investment deals rubber-stamped dubious transactions.
Anyone who paid attention to the financial collapse of 2008 knows that the ratings agencies who are the arbiters of whether companies are a safe bet to take on debt played a big role. Less known are the exact details of how big a role they played. The Rolling Stone’s Matt Taibbi fills in the gaps in a blockbuster cover story.
Taibbi’s new piece, titled “The Last Mystery of the Financial Crisis,” shows in detail the role of the ratings agencies and how they rubber-stamped dubious bank transactions. The agencies Taibbi focuses on are the nation’s top two: S&P and Moody’s, which control a good chunk of the ratings agency market. Ratings agencies define what is safe to put money in and what is not. Their ratings are vitally important to the financial industry. But instead of evaluating companies objectively and giving them the ratings they deserve, Moody’s and S&P doled out top ratings to entities that were undeserving.
The new details Taibbi writes on come from documents and e-mails released as part of a lawsuit against the ratings agencies that alleged they conspired with Morgan Stanley to induce investment in subprime deals...
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