Moody's CEO blames liars for subprime mess

Posted Jan 28th 2008 8:15AM by Jonathan Berr
Filed under: Scandals, Economic Data, Recession

Moody's Corp. (NYSE: MCO) Chief Executive Raymond McDaniel Jr. made a stunning admission at the World Economic Forum in Davos about the subprime mortgage crisis: "In hindsight, it is pretty clear that there was a failure in some key assumptions that were supporting our analytics and our models."

In other words, people lied to us because the 'information quality" the ratings agency got was lacking in "completeness and veracity," as Floyd Norris notes in the New York Times.

Come to think of it, this has a familiar ring to it. Back in 2002, Moody's and S&P whined to Congress about how they missed the implosion of Enron. Those meanies at Adelphia also bamboozled Moody's.

Question: Aren't Moody's and S&P paid a lot of money to check the "completeness and veracity" of the information people tell it so it can rate stuff?

Tags: adelphia, enron, inthenews, mco, moody's, ratings agencies, RatingsAgencies