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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsBankers Brought Rating Agencies ‘To Their Knees’ On Tobacco Bonds
This story was co-published by ProPublica and Marketplace.
When the economy nosedived in 2008, it didnt take long to find the crucial trigger. Wall Street banks had peddled billions of dollars in toxic securities after packing them with subprime mortgages that were sure to default.
Behind the bankers actions, however, stood a less-visible part of the finance industry that also came under fire. The big credit-rating firms S&P, Moodys and Fitch routinely blessed the securities as safe investments. Two U.S. investigations found that raters compromised their independence under pressure from banks and the lure of profits, becoming, as the governments official inquiry panel put it, essential cogs in the wheel of financial destruction.
Now there is evidence the raters also may have succumbed to pressure from the bankers in another area: The sale of billions of dollars in bonds by states and municipalities looking to quickly cash in on the massive 1998 legal settlement with Big Tobacco.
A review by ProPublica of documents from 22 tobacco bond offerings sold by 15 state and local governments shows that bankers routinely bragged about having their way with the agencies that rated their products. The claims were brazen, the documents show, with bankers saying they routinely played one firm against its competitors to win changes to rating methods, jack up a rating or agree to rate longer-term, riskier bonds. ....................(more)
The complete piece is at: http://www.truthdig.com/report/item/bankers_brought_rating_agencies_to_their_knees_on_tobacco_bonds_20141227
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Bankers Brought Rating Agencies ‘To Their Knees’ On Tobacco Bonds (Original Post)
marmar
Dec 2014
OP
Odin2005
(53,521 posts)1. This is outrageous.
These Banksters are out of control psychopaths.
2naSalit
(86,039 posts)2. Much like
the police... not a good combo for anyone but them.
IDemo
(16,926 posts)3. Read - "The Divide: American Injustice in the Age of the Wealth Gap" by Matt Taibbi
You will experience outrage by the truckloads.
http://www.amazon.com/The-Divide-American-Injustice-Wealth/dp/081299342X
Odin2005
(53,521 posts)5. Thanks for the book plug! I like Taibbi! n/t
xchrom
(108,903 posts)4. du rec.