New details of how ratings agencies conspired with Morgan Stanley to cause 2008 financial crash.
Anyone who paid attention to the financial collapse of 2008 knows that the ratings agencies who are the arbiters of whether companies are a safe bet to take on debt played a big role.
... instead of evaluating companies objectively and giving them the ratings they deserve, Moody’s and S&P doled out top ratings to entities that were undeserving.
The new details Taibbi writes on come from documents and e-mails released as part of a lawsuit against the ratings agencies that alleged they conspired with Morgan Stanley to induce investment in subprime deals.
The ratings agencies knew they were rubber-stamping bad deals, e-mails show. “Lord help our fucking scam,” one e-mail from an S&P executive reads.
Despite the implosion of the U.S. economy due to the top grades these bad deals got, the system remains much the same. [emphasis mine]
Alexander Hamilton's and James Madison's words in the 1787 Convention have borne fruit.
Hamilton: The people are turbulent and changing; they seldom judge or determine right. Give therefore to the rich and well-born a distinct and permanent share in the government. They will check the unsteadiness of the mass of the people, and as they cannot receive any advantage by a change, they therefore will ever maintain good government (June 18)
Madison: In framing a system we wish to last for ages, we should not lose sight of the changes the ages will bring. An increase of population will increase the proportion who labor under all the hardships of life and secretly sigh for a more equal distribution of its blessings. These may in time outnumber those who are placed above feelings of indigence. According to the equal laws of suffrage, the power will slide into the hands of the former. No agrarian attempts have yet been made in this country, but symptoms of a leveling spirit have sufficiently appeared in certain quarters to give notice of the future danger. Landholders ought to have a share in the government, to support these invaluable interests and check the other. It ought to be formed as to protect the minority of the opulent against the majority. (June 26)
Do you wonder why the Founders wanted the Convention closed to the public?
The above and more were published fifty years later. A few delegates warned of the dangers but they were a minority.
Search on Max Farrand and look for the links to Volumes One through Three of his Records of the Federal Convention. In Volumes One and Two, arranged in date order, are the words the Founders spoke. In Volume Three are letters and other writings.
The United States of Sociopathy?