BLOOMBERG SERIES ON THE RATINGS AGENCIES

The clowns who gave AAA ratings to crap have gotten some criticism in the past and now Bloomberg has a 2-part series looking at what Standard & Poor's, Moody's and Fitch did to help create the Big Shitpile:

Bringing Down Wall Street as Ratings Let Loose Subprime Scourge
By Elliot Blair Smith
Sept. 24 (Bloomberg)

This first article also provides a nice summary of how we got into this mess:

Driven by competition for fees and market share, the New York-based companies stamped out top ratings on debt pools that included $3.2 trillion of loans to homebuyers with bad credit and undocumented incomes between 2002 and 2007. As subprime borrowers defaulted, the companies have downgraded more than three-quarters of the structured investment pools known as collateralized debt obligations issued in the last two years and rated AAA.

Without those AAA ratings, the gold standard for debt, banks, insurance companies and pension funds wouldn't have bought the products. Bank writedowns and losses on the investments totaling $523.3 billion led to the collapse or disappearance of Bear Stearns Cos., Lehman Brothers Holdings Inc. and Merrill Lynch & Co. and compelled the Bush administration to propose buying $700 billion of bad debt from distressed financial institutions.

We also learn the motivation for giving inflated ratings: MONEY!

The rating companies earned as much as three times more for grading complex structured finance products, such as CDOs, as they did from corporate bonds. Through 2007, they had record revenue, profits and share prices. Moody's operating margins exceeded 50 percent for the past six years...By 2000, structured finance was the companies' leading source of revenue, their financial reports show. It accounted for just under half of Moody's total ratings revenue in 2007.