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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives

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From: expiredoptions	2/6/2013 7:22:35 AM
	of 221408

S&P Analyst Joked of Bringing Down the House Before Crash Standard & Poor’s employees sang and danced to a mock song inspired by “Burning Down the House” and joked about the company’s willingness to rate deals “structured by cows” before the 2008 global financial collapse, according to a U.S. government lawsuit. Beginning in the fall of 2006 and continuing to about the spring of 2007, one S&P executive regularly expressed frustration to colleagues that she was prevented by other executives from downgrading ratings of subprime mortgage securities because of concern that the company’s business would be affected, the government said. “This market is a wildly spinning top which is going to end badly,” said another executive in 2006, according to the complaint. In March 2007, an analyst set wrote lyrics to the tune of “Burning Down the House” by the rock group Talking Heads. According to the complaint, it began: “Watch out / Housing market went softer / Cooling down / Strong market is now much weaker / Subprime is boi-ling o-ver / Bringing down the house.” The government said the analyst later sent a video of himself singing and dancing the first verse “before an audience of laughing S&P co-workers.” Catherine Mathis, an S&P spokeswoman, called the video “obviously in poor taste.” “While it may reflect a terrible sense of humor, it in no way reflects the hard work and analysis by the analysts rating securities,” Mathis said yesterday in an interview. The above exerts were part of a full Bloomberg article today about the Fed law suite over S&P ratings of MBS during the real estate boom. Here is the full article: bloomberg.com

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