REPORT: Senate Banking Committee Probing S&P Downgrade of US Debt

[Agloco]

Surprise, surprise.......

http://www.businessinsider.com/report-senate-banking-committee-probing-sp-downgrade-of-us-credit-rating-2011-8



“In the minds of serious, reasonable, and informed individuals there is no doubt that the U.S. will meet its debt obligations and we are seeing even more proof of that today. As the financial markets stumble, investors continue to regard Treasury debt as a safe haven in times of economic uncertainty. This irresponsible move by S&P may, however, have spillover effects that tax the American people by increasing interest rates on home loans, credit cards, and car loans, and by increasing the cost of finance for some state and local governments. I am deeply disappointed in S&P’s decision to enter into the game of political punditry.”



Read more: http://www.businessinsider.com/report-senate-banking-committee-probing-sp-downgrade-of-us-credit-rating-2011-8#ixzz1UTTeiOBr

[ElNono]

This e-mail from an S&P employee, uncovered by a congressional investigation, says it all: “Let's hope we are all wealthy and retired by the time this house of cards falters.”

Read more: http://curiouscapitalist.blogs.time.com/2011/08/08/why-congress-and-sp-deserve-each-other/#ixzz1UTUTO96q

[boutons_deux]

Yves is always right on this crap:

Did Standard and Poor’s Break SEC Regulations in Disclosing Its Downgrade to Select Parties?

The Administration and its allies have gone after Standard and Poor’s for its downgrade of the US bond rating to AA+. They have attacked S&P’s general competence, its failure to reexamine its decision in the light of a $2 trillion math error (a Wall Street Journal story does not reflect well on S&P’s haste) and the subjective and political basis for its judgment. Even if these attacks have merit, however, they come off as being less than convincing by virtue of sounding like sour grapes.

There is a much more straightforward basis for questioning S&P’s conduct, and it has nothing to do with how S&P arrived at its rating. There is compelling evidence that the ratings agency made selective disclosure of its downgrade decision before it made it public last Friday evening. A reader told us certain hedge funds were informed Tuesday and traded successfully on the information. A separate source had told me certain banks were briefed on Thursday and were told of the US downgrade but assured their ratings would be unaffected. On Friday morning, Twitter was alight with the news.

Disclosing news of a ratings decision is required under SEC rules to be made publicly. All the discussion with favored parties is clear regulatory violation. Here is the germane section (boldface ours):

http://www.nakedcapitalism.com/2011/08/did-standard-and-poors-break-sec-regulations-in-disclosing-its-downgrade-to-select-parties.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capi talism%29

[cheguevara]

the damange is already done. bitching and whining won't do anything

[RandomGuy]

Yves is always right this crap:

Did Standard and Poor’s Break SEC Regulations in Disclosing Its Downgrade to Select Parties?

The Administration and its allies have gone after Standard and Poor’s for its downgrade of the US bond rating to AA+. They have attacked S&P’s general competence, its failure to reexamine its decision in the light of a $2 trillion math error (a Wall Street Journal story does not reflect well on S&P’s haste) and the subjective and political basis for its judgment. Even if these attacks have merit, however, they come off as being less than convincing by virtue of sounding like sour grapes.

There is a much more straightforward basis for questioning S&P’s conduct, and it has nothing to do with how S&P arrived at its rating. There is compelling evidence that the ratings agency made selective disclosure of its downgrade decision before it made it public last Friday evening. A reader told us certain hedge funds were informed Tuesday and traded successfully on the information. A separate source had told me certain banks were briefed on Thursday and were told of the US downgrade but assured their ratings would be unaffected. On Friday morning, Twitter was alight with the news.

Disclosing news of a ratings decision is required under SEC rules to be made publicly. All the discussion with favored parties is clear regulatory violation. Here is the germane section (boldface ours):

http://www.nakedcapitalism.com/2011/08/did-standard-and-poors-break-sec-regulations-in-disclosing-its-downgrade-to-select-parties.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capi talism%29

Surprise. So S & P had two sets of rules, one for when to tell things to large financial institutions, one for everybody else?

:bang

[coyotes_geek]

the damange is already done. bitching and whining won't do anything

As far as the downgrade itself, yeah. But if it's true that S&P was selectively tipping off various institutions then that's something that needs to be investigated.

[Agloco]

All the discussion with favored parties is clear regulatory violation.