Standard & Poor's Is Giving More Favorable Ratings Than Its Rivals On Mortgage-Backs; NY Times Questions Whether Agency Is Repeating Mistakes That Helped Cause The Global Financial Crisis Hot

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This is great journalism. An analysis was conducted for The Times by Commercial Mortgage Alert and finds S&P is tailoring its ratings to get more business. According to The Times, S&P responded by saying the analysis has flaws and is incorrect, "though it declined to elaborate on what those flaws were."


Here's the clincher: S&P is fighting a government lawsuit accusing it of similar practices before the financial crisis.


This gives you an idea of how ineffective government regulation is and how much much influence Wall Street has over government regulation. 


In January 2011, The Financial Crisis Inquiry Commission, set up by the US Congress and President to investigate the causes of the crisis, reported, "the three credit rating agencies were key enablers of the financial meltdown." Five years after the world financial system nearly crashed, we're seeing allegations of the same practices that caused the crisis.


Despite years of hearings and debate, little was really done to reform the ratings games. The regulatory system permits the same kind of abuse now that went on before the financial crisis. The money at stake and risk of the ratings games played is astronomical, so reform is diffcult to achieve.


It has to make you cyncial about the prospects for reform of the financial advice business.

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