Standard & Poor’s news release responding to the government’s lawsuit over its mortgage-bond grades complained that the ratings company is being sued for “not predicting full magnitude of housing downturn despite failure of virtually everyone to do so.”
Mark Spitznagel pushes the throttles on his new twin-engine Chris-Craft Corsair 28, slicing through Grand Traverse Bay in northern Michigan on a warm day in late July. As the speedboat reaches more than 50 miles per hour, Spitznagel’s blond hair flying in the wind, he churns up a big wake.
A U.S. lawsuit against ICP Asset Management LLC opens a new front in the government’s probe of collateralized debt obligations, focusing on managers of instruments that in some cases wiped out investors in less than a year.
The Justice Department decision to sue Standard & Poor’s has investors asking why Moody’s Investors Service and Fitch Ratings weren’t targeted for awarding the same top grades to troubled mortgage bonds and other debt securities.
What should we make of the revelation last week -- courtesy of Richard Teitelbaum and Bloomberg Markets magazine -- that in July 2008 Treasury Secretary Henry Paulson shared some confidential musings with a group of plugged-in New York hedge-fund executives at the offices of Eton Park Capital Management LP?