Looks like those little credit ratting agency funsters pooped on their spreadsheets:
Moody’s awarded incorrect triple A ratings to billions of dollars worth of a type of complex debt product due to a bug in its computer models, a Financial Times investigation has discovered. Internal Moody’s documents seen by the FT show that some senior staff within the credit agency knew early in 2007 that products rated the previous year had received top-notch triple A ratings and that, after a computer coding error was corrected, their ratings should have been up to four [forty, surely?--Ed] notches lower...
...On discovering the error early in 2007, Moody’s corrected the coding glitch and instituted methodology changes...The products remained triple A until January this year when, amid general market declines, they were downgraded several notches......[Emphasis added]
Moody’s error gave top ratings to debt products
by Sam Jones, Gillian Tett and Paul J Davies
The Financial Times May 21 2008
...“Once again, the rating agencies have proved that when it comes to some structured credit products, a rating is meaningless,” Janet Tavakoli, an independent consultant, told the FT in November 2006. ”All AAAs are not created equal, and this is a prime example.” ...[Emphasis added].
CPDOs expose ratings flaw at Moody’s
By Sam Jones, Gillian Tett and Paul J Davies
The Financial Times May 21 2008
Hahahahahahahahahahahahahahahahahahahahahahaahahahohohohoho.
The REAL irony of the situation is that even the CORRECT model was COMPLETELY wrong.Oh yeah, what about S&P ratings? Those AAA as well. AHAHAHAHAHAHAH.
Hahahahahhahahahhaha. Thanks. Needed that laugh.
David S. Products
Personal communication May 19 2008
Comments