How screwed up are the Ratings Agencies? Look at their email and you'll know the answer to that question. Here are exceprts from Housing Wire:
In one email, an S&P staffer emailed another that an RMBS deal being rated was “ridiculous” and that “we should not be rating it,” according to the report. They reply came back saying that “we rate every deal,” and that “it could be structured by cows and we would rate it.”
Even after these emails, the SEC is still worried about short-sellers. Of course SEC does not want the credit agencies to start being honest NOW. Imagine all those AAA CDOs becoming junk.
That source said the result was that most firms were often short-handed, turnover was high, and deals were rated often “to get them out of the door.”
“The idea that the agencies actively colluded with issuers misses the point, in my opinion,” said the source. “That would assume that we had the time and ability to do so, neither of which was often the case. We really were turned into order takers, and our main concern was to keep deals.”
I am not sure how "reliable" this source is. According to the "Source", it seems it was lack of time as the main cause of bogus ratings and not conflict of interest. I doubt that. I am sure conflict of interest had something to do with it. After all, the higher you rate, the more business you get from the investment banks.
http://www.housingwire.com/2008/08/04/sps-rating-concerns-structured-by-cows/
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