Not to mention, you occasionally get some timely and revealing reportage thrown into the bargain, as well:
Some Congressman, not sure who 'cause I missed his name, just brought up the following IM conversation between two S&P employees, to former residential mortgage ratings managing director, Frank Raiter, from several months back (no name check on the deal but surely the DB brain trust can hazard a guess):
S&P employee #1: By the way that deal is ridiculous
S&P employee #2: I know, right. That model definitely does not capture half the risk
S&P employee #1: We should not be rating it.
S&P employee #2: We rate every deal. It could be structured by cows and we would rate it.
Congressman: What do you think this means, Mr. Raiter?
Raiter: Um...I don't know...I guess a casual acceptance of these things.
Sean Egan (of Egan-Jones) chimes in: Perhaps that cow was particularly talented?
Which leads me to speculate on the true nature of the credit rating process in general:
The Innocent Eye Test, indeed.
© 2008 The Epicurean Dealmaker. All rights reserved.