The rating agencies themselves acknowledged some responsibility. "We did not anticipate the magnitude and speed of the deterioration,” said Moody's said in prepared remarks.
However opponents say that’s the tip of the iceberg. In today's hearing before the House Oversight Committee, the credit rating agencies looked more like profit-hungry institutions that would give any deal their blessing for the right price, reports CNBC’s Scott Cohn.
Here's an example from the testimony. This is an instant message exchange between two unidentified S&P officials about a mortgage backed security deal on 4/5/2007:
Official #1: Btw that deal is ridiculous.
Official #2: I know right...model def does not capture half the risk.
Official #1: We should not be rating it.
Official #2: We rate every deal. It could be structured by cows and we would rate it.
Also from the testimony, here's a note from an S&P employee that says, "Let's hope we are all wealthy and retired by the time this house of cards falters."
The ratings agencies betrayed our trust, says an irate Jon Najarian on CNBC’s Closing Bell. In order to amend the broken trust we need to get some skins on the wall.