STANDARD & POOR BETRAYED AMERICA

By revenue, Standard & Poor is the largests ratings agency in the world and it was in the tank when it came to rating collateralized debt obligations (CDOs), part of the Big Shit Pile.

S&P Email: 'We Should Not Be Rating It'
By AARON LUCCHETTI
August 2, 2008; Page B1
WALL STREET JOURNAL

Problems keeping up with the surging growth of mortgage-related debt products were particularly acute at Standard & Poor's Ratings Services, according to a draft version of a Securities and Exchange Commission report on bond-rating firms.

In one email, an S&P analytical staffer emailed another that a mortgage or structured-finance deal was "ridiculous" and that "we should not be rating it." The other S&P staffer replied that "we rate every deal," adding that "it could be structured by cows and we would rate it."

Meanwhile, an analytical manager in the collateralized debt obligations group at S&P told a senior analytical manager in a separate email that "rating agencies continue to create" an "even bigger monster -- the CDO market. Let's hope we are all wealthy and retired by the time this house of cards falters.;O)"

Conflicts of interest began as early as 2004:

But satisfying Wall Street issuers also crept into the process. "We are meeting with your group this week to discuss adjusting criteria for rating CDO's of real-estate assets...because of the ongoing threat of losing deals," S&P commercial mortgage analyst Gale Scott wrote to colleagues in August 2004, according to the draft report and a person familiar with the situation.