…or, the funny things that get archived when you use Blackberry instant messaging (hint: don’t). From CNBC, covering a hearing today before the House Oversight Committee where the credit ratings agencies were painted in a rather unattractive light -
Case in point: this instant message exchange between two unidentified Standard & Poor’s officials about a mortgage-backed security deal on 4/5/2007:
Official #1: Btw (by the way) that deal is ridiculous.
Official #2: I know right…model def (definitely) does not capture half the risk.
Official #1: We should not be rating it.
Official #2: We rate every deal. It could be structured by cows and we would rate it.
I am LOL (laughing out loud). What kind of a deal would cows want to structure, anyway? A deal where they sold credit-default swaps on Lehman bonds and used the proceeds to buy carbon offsets for their methane? Are the cows, and not some hedge fund, the ones out there liquidating all their shares of Potash and Mosaic to cover?
Addendum: FT Alphaville has an excellent and well-reasoned analysis of this subject, looking beyond the cows to the bigger question, which is, why the ratings agencies would put a rating on a deal they knew to have such a faulty risk model. Good reading.
ECONinfo // Oct 23, 2008 at 8:42 am
[...] bei:http://lolfed.com 23. Oktober 2008, 13:21 [...]
Lolo, ESQ // Oct 23, 2008 at 9:04 am
remember that leather floor thread from fashionism? that kind of deal, do not want. moo.
Likely Won’t Help The Newspaper Industry // Oct 21, 2009 at 9:09 am
[...] here’s the scoop: everyone knows the credit rating agencies are kind of worthless. Remember the cow incident? Not only would they rate it, they would have rated it highly, because why not. It’s what [...]
Likely Won’t Help The Newspaper Industry // Oct 21, 2009 at 9:09 am
[...] here’s the scoop: everyone knows the credit rating agencies are kind of worthless. Remember the cow incident? Not only would they rate it, they would have rated it highly, because why not. It’s what [...]