Does Uncle Sam want payback?
Two weeks ago, Standard and Poor’s downgraded the U.S. credit rating from AAA to AA+, dealing a blow to financial markets and causing outrage in the White House and Congress.
Now it seems that the U.S. has struck back … sort of. The New York Times reports that the Justice Department is investigating S&P over the whole ratings fiasco that preceded the Great Recession.
As you may remember, S&P, together with Fitch and Moody’s continued rating useless mortgage securities as AAA right up to their going belly-up and were paid handsomely by the owners of the securities.
This conflict of interest and the bogus ratings have been fingered as a major cause of the housing collapse and the subsequent global recession.
The NYT states that the investigation began before the U.S. downgrade by S&P, but is now being ramped up by Justice and will also be subject of congressional committees.
Is this revenge or just the normal course of events?
Read the full story here.
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