This only fills in the anecdote blanks for anyone paying attention, but there is a looooong new two-part Bloomberg series out castigating the credit rating agencies. It’s worth reading, however, and you can think of it as a complement to my own piece ("The Blame Game (II): Credit Rating Agencies are Rug Pee-ers") from a week ago.
My only question: I have been criticizing credit ratings agencies for years, to no avail. Where was Bloomberg with this sort of journalistic detail five years ago when a piece like this with Bloomberg-ian distribution could have really mattered? As Mike Milken says, you get full points for telling me before it happened, not afterward.
Anyway, here is a numbing quote from an S&P whistle-blower quoted in the piece:
We knew the delinquencies were bad. The fact was, if we could have hired a supreme being to tell us exactly what the loss was on a loan, they wouldn’t have hired him because the Street wasn’t going to pay us extra money to know that.
How lovely. More here.