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Someone's got to take out the trash

Amazing article in today's Times about Moody's.  They used to refuse any compensation from the issuers they were rating, because this would create a conflict of interest and undermine their credibility.  Then they decided to be compensated by those businesses.  Then they went public and got caught up in short-term earnings mania.  Then they started rating trash instruments as AAA, and when good customers complained about a lower rating they would raise it.  Meanwhile, they were basing projections on scenarios in which, say, there was no estimated chance that housing prices would generally decline.

Full post as published by Start Making Sense on December 07, 2008 (boomark / email).