Drudge Retort: The Other Side of the News
Thursday, August 28, 2014

The United States, which is suing Standard & Poor's for $5 billion for allegedly issuing inflated credit ratings before the 2008 crash, said Monday it is confident that documents the rating agency wants for its defense will not show that the lawsuit was filed in retaliation for a downgrade of the country's debt. In a filing with the U.S. District Court in Santa Ana, California, the Department of Justice said S&P's "general suspicions" do not justify the rating agency's request for the release of dozens of unredacted documents, including materials from former Treasury Secretary Timothy Geithner.

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S&P, a unit of New York-based McGraw Hill Financial Inc, has said the government singled it out for a lawsuit after it took away the United States' "triple-A" rating on Aug. 5, 2011.

The $5 billion lawsuit filed in February 2013 accused S&P of issuing inflated ratings before the 2008 financial crisis to win more fees from issuers, and failing to downgrade debt backed by mortgage-backed securities fast enough.

Harold McGraw, the chairman of McGraw Hill, has said Geithner angrily told him on Aug. 8, 2011, three days after the downgrade, that the downgrade was based on a "huge" math error, and that the company would be held "accountable."

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Considering the sale of U.S. Treasury bonds since their downgrade it is obvious that S&P's evaluation is a joke. I said at the time that the real downgrade was to S&P's credibility. S&P should rightly face a huge penalty for misleading investors pre-2008.

#1 | Posted by danni at 2014-08-27 09:58 AM | Reply | Flag: | Newsworthy 1

the U.S. Department of Justice said S&P's "general suspicions" do not justify the rating agency's request for the release of dozens of unredacted documents, including materials from former Treasury Secretary Timothy Geithner.


True. You need more than "we think something happened" to get the evidence to show it did. Catch-22. You have to prove something in order to get what you need to prove it.

#2 | Posted by kanrei at 2014-08-27 10:00 AM | Reply | Flag:

Finally, the are going after the credit rating agencies. These agencies were the great enablers of the 2008 meltdown because if not for them "cooking the books", those worthless mortgage backed securities could not have been sold.

#3 | Posted by FedUpWithPols at 2014-08-28 02:30 PM | Reply | Flag: | Newsworthy 1

Don't worry those documents are safely hid at democrat national headquarters or were lost at the same time as all those IRS hard drives.

Ah, democrat corruption its like no other. Rotten to the core, evil in every way possible. Yep, democrats are the worst kind of vermin.

#4 | Posted by mcmlcxx at 2014-08-28 07:39 PM | Reply | Flag:

Why are not senior corporate officers going to prison, instead of simply passing the fine and bill to shareholders, etc? We need to see corporate officers facing a better understanding of risk reward instead of passing their malfeasance on to others.

#5 | Posted by Robson at 2014-08-28 08:43 PM | Reply | Flag: | Newsworthy 1

#4 | Posted by mcmlcxx

Have any comment on the actual thread topic?

#6 | Posted by REDIAL at 2014-08-28 10:36 PM | Reply | Flag:

#4 | Posted by mcmlcxx

OK 1149120, you are right it's just Democrats who are corrupt. It's not like Republicans sell there soles to every major corporation out there or the Koch's just to get elected. I can't wait to see some pro-constituent or pro-freedom legislation to come from that side of the aisle instead of pro-corporation.

To be frank even if it was just in retaliation it is very deserved as these rating agencies contributed greatly to the collapse by rating junk as much better grades and helped drive home prices up. I seem to recall a lot of articles calling their ratings into question not just on this.

#7 | Posted by GalaxiePete at 2014-08-29 09:09 AM | Reply | Flag:

"hy are not senior corporate officers going to prison, instead of simply passing the fine and bill to shareholders, etc?"

I agree that senior officers should be going to jail but shareholders should rightly suffer as well, they profited from the lies sold by the company and should now lose that profit and pay a penalty as well.

#8 | Posted by danni at 2014-08-29 09:18 AM | Reply | Flag:

I agree that senior officers should be going to jail but shareholders should rightly suffer as well, they profited from the lies sold by the company and should now lose that profit and pay a penalty as well.

#8 | Posted by danni

I agree. These banks shareholders and executives have profited on the initial scam and profited again when taxpayers and Fed bailed them out.

They should have had their equity depleted and left executives penniless and prosecuted, and the government standing behind the depositors. That would have obviously led to big time turmoil in the financial markets. But it would have changed behavior and convinced Americans that the Wall St "financialization" of the USA was not really a good thing.

Interest bearing products that provide decent fixed returns above inflation provide security and diversification and are needed for risk balance in insurance reserves, pensions, etc. The use of historic balanced asset plan is all screwed up because of the push by the Fed to keep Americans spending other peoples money and keep bank stock share prices up.

#9 | Posted by Robson at 2014-08-29 12:07 PM | Reply | Flag:

Bailed out for trillions.

Fined for billions.

Hope and change = Mission accomplished.

Idiots.

#10 | Posted by Shawn at 2014-08-29 01:23 PM | Reply | Flag:

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