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S & P and other major credit agencies partnered with Wall Street speculation and grand theft because they're paid by the companies they rate. In fact, Washington, too-big-to-fail banks, other FIRE industry (finance, insurance and real estate) giants, and major rating agencies were complicit in fueling the bubble economy and crash by design, not chance.
What Franklin Roosevelt once said about politics applies to easily manipulated markets and other Wall Street shenanigans that "(n)othing happens by accident. If it happens, you can bet it was planned that way."
It's because there's so much money in it for all of them, including corrupted politicians to the highest levels on the take, getting huge campaign contributions for going along plus unreported special favors.
Now, an April 13 Senate Investigations Subcommittee report on the "key causes of the financial crisis (catalogued) conflicts of interest, heedless risk-taking and failures of federal oversight (resulting in) the deepest recession since the Great Depression."
Chairman Carl Levin specifically cited "high-risk lending, regulatory failures, inflated credit ratings, and Wall Street firms engaging in massive conflicts of interest" by advising clients one way, then betting against them covertly. In other words, committing massive, brazen fraud to earn billions of dollars in dirty money.
Using thousands of internal industry, government and regulatory agency documents, emails, memos and other materials, "the report discloses how financial firms deliberately took advantage of their clients and investors, how rating agencies assigned AAA ratings to (junk), and how regulators sat on their hands instead of" doing their job honestly above board. "Rampant conflicts of interest are the threads that run through every chapter of this sordid story."
Naming S & P and Moody's specifically, the report said it wasn't in their "short-term economic interest....to provide accurate credit ratings for high-risk (junk debt instruments) because doing so would have hurt their own revenues," so they conspired with Wall Street crooks for greater profits.
The full report can be accessed through the following link:
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