Rating Agency Employee: I Hope I’m Rich and Retired Before the Crash

Read and shed a tear for the poor rating agencies overwhelmed by unforeseeable market conditions – except for the one employee who admitted that he hoped to be rich and gone before the crash. On the other hand, don’t con artists often arrange for “objective witnesses” who testify that it’s not a con?

Credit-Rating Companies `Sold Soul,’ Employees Said -Bloomberg News -Lorraine Woellert and Dawn Kopecki – 22 October 08

Employees at Moody’s Investors Service told executives that issuing dubious creditworthy ratings to mortgage-backed securities made it appear they were incompetent or “sold our soul to the devil for revenue,” according to e-mails obtained by U.S. House investigators…

Moody’s and S&P in recent months had to downgrade thousands of mortgage-backed securities, many of which were originally given top AAA ratings, as delinquencies on the underlying loans soared well beyond the companies’ estimates and home values fell faster than they expected…

The Securities and Exchange Commission in a July report found the credit-rating companies improperly managed conflicts of interest and violated internal procedures in granting top rankings to mortgage bonds.

An e-mail that a S&P employee wrote to a co-worker in 2006, obtained by committee investigators, said, “Let’s hope we are all wealthy and retired by the time this house of cards falters.”…

Jerome Fons, a former managing director of credit policy at New York-based Moody’s, told lawmakers that originators of structured securities “typically chose the agency with the lowest standards, engendering a race to the bottom in terms of rating quality.”…

Click here to read the full article mostly consisting of rating agency spokespeople whining that they were caught off guard by the un-historical market moves and other B.S.

Or

Actual quotes from IM exchange between two S&P employees:

Official #1: Btw (by the way) that deal is ridiculous.

Official #2: I know right…model def (definitely) does not capture half the risk.

Official #1: We should not be rating it.

Official #2: We rate every deal. It could be structured by cows and we would rate it.