Rating agencies accused of fraud

This is not news. But a new lawsuit has been filed by the liquidators of two Bear Sterns hedge funds. See Taibbi's earlier report on the rampant fraud in the rating agencies. Some perpetrator email quotes from the latter:

"'Lord help our fucking scam . . . this has to be the stupidest place I have worked at,' writes one Standard & Poor's executive. 'As you know, I had difficulties explaining HOW we got to those numbers since there is no science behind it,' confesses a high-ranking S&P analyst. 'If we are just going to make it up in order to rate deals, then quants [quantitative analysts] are of precious little value,' complains another senior S&P man. 'Let's hope we are all wealthy and retired by the time this house of card[s] falters,' ruminates one more."


And not one member of the rating agencies, or the bank executives that created these bogus financial instruments, went to jail. Yes, they got fines that seem like a lot of money but compared to the profits they made from the fraud it is miniscule. It's like I rob a bank for $1 million, they catch me, tell me I have to pay back $100,000 with no criminal charges. Sure, I'll take that and rob more banks. Same difference, and the same thing will happen again and again with our banks, insurance companies and bogus ratings.

Recall I was an insurance underwriter in a previous life. The same dynamic applied to some of the companies I worked with. I was pressured to write bad business knowing full well the losses would far outweigh the premiums. But the goal was to outdo the losses by continually writing new business at a rapid rate, any business including the very bad, to make the loss ratio appear to be not as bad. But you can only do that so long before the losses catch up, overwhelm to loss ratio and you go out of business, claiming the public via government subsidies must finance the insurance on all those you left high and dry.

Yes, that is the actual strategy, same as the financial collapse. To knowingly fuck over the public to support a corrupt and fraudulent system to make huge profits for yourself to live high on the hog the rest of your life while everyone else suffers. Sick, huh? But true. And proven time and again in lawsuits. But again, just pay me back 1/10 of what you stole and we'll call it even. Fuck.