Ratings

[Ilyas]

Head of Ratings Agency Tells Investors Not to Rely on Ratings


Testifying before the U.S. Financial Crisis Inquiry Commission today,
the CEO of Moody's credit rating agency announced that he was
"certainly not satisfied with the performance" of highly rated
subprime mortgage loans (you know, the ones linked to financial
crisis) and that the company was working to fix the rating process.
Moody's, along with Fitch and Standard and Poor's, has been accused of
giving artificially high ratings to risky loans, and later downgrading
the ratings after homeowners were unable to pay them back. Chairman
Phil opened today's panel by criticizing Moody's role in the crisis.
"Moody's did very well. The investors who relied on Moody's ratings
did not do so well," Angelides said. Reading from a prepared
statement, Moody's CEO Raymond McDaniel remarked that credit ratings
are "not a buy, sell or hold recommendation," and that clients should
do their own homework before making investment decisions.

http://www.businessweek.com/news/2010-06-02/moody-s-chief-says-cdo-ratings-deeply-disappointing-update2-.html