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Moody's Corporation will pay $864 million to settle federal and state claims that it gave misleading ratings to risky mortgage investments, leading to the subprime mortgage crisis in the US and to the Great Recession.
In the deal, announced January 13, the ratings agency will give $437.5 million to the Justice Department and $426.3 million to be divided among the 21 involved states and the District of Columbia.
The settlement does not come close to the hardship caused by the global crisis theirs and other ratings set into motion, of course. The US Financial Crisis Inquiry Commission found in 2011 that the 2008 mortgage crisis wiped out $11 trillion of American household wealth, Bloomberg notes.
"We conclude the failures of credit rating agencies were essential cogs in the wheel of financial destruction," the conclusions in its final report read. [PDF]
[...] This crisis could not have happened without [Moody's, Fitch, and Standard and Poor's]. Their ratings helped the market soar and their downgrades through 2007 and 2008 wreaked havoc across markets and firms.
Standard and Poor agreed to pay nearly $1.4 billion two years ago to settle similar allegations by the Justice Department, 19 states and the District of Columbia, Yahoo News reports. Moody's settled before a federal lawsuit was filed; Standard and Poor settled only after the US filed a $5 billion suit against them for fraud, Reuters points out.
(Score: 3, Informative) by bzipitidoo on Tuesday January 17 2017, @01:37PM
There's a simple plan to deal with the debt: Stop giving the store away to the rich. Stop assigning guard duty of the henhouse to the foxes.
It's incredible how cynically selective the budget hawks are. They were nowhere to be seen when the US voted to go to war in Iraq in 2003. Cost of that war is about $2 trillion, with still more to come. Final cost may reach $6 trillion. But soon as some spending they don't like comes up, like the $0.000004 trillion per year from PBS for Sesame Street, they're screaming about the waste.
(Score: 0) by Anonymous Coward on Tuesday January 17 2017, @02:25PM
That's a somewhat odd conclusion, given how much of the budget is non-discretionary transfer payments like SS and Medicaid.
(Score: 2) by bzipitidoo on Tuesday January 17 2017, @03:06PM
SS has run up a massive surplus, didn't you realize that? The government borrows this surplus money, eventually paying it back, with interest. To count that repayment as spending on entitlements is disingenuous to say the least.
Just what percentage of the budget is spent on SS? Seems the answer depends on who you ask.
(Score: 1) by kurenai.tsubasa on Tuesday January 17 2017, @04:22PM
There's a pie graph on Wikipedia for US Federal Spending FY 2015 [wikipedia.org]. That's 882 billions for SS. (937 billions for healthcare also but we'll just look at SS since the number is close enough). Remembering my gumshoe training over at Acme, which served me well apprehending Carmen Sandiego, I've noted the CIA World Factbook gives a US population [cia.gov] of 324 millions estimated July 2016. That works out to $2,720 per year for our basic income budget.
SSA.gov also has a statistical snapshot of SS recipients [ssa.gov] for November 2016. In total it gives 66.0 millions (still rounding to 3 figures, includes 45.3 million retired and also SSI recipients). That bumps their income up to $13,400 per year.
That seems pretty close to the reality of being a SS recipient. Have I gone wrong somewhere (misunderstood the pie graph, missed some other graph reactionaries are throwing around showing trillions for SS budget, etc)? I don't have a point yet, just trying to wrap my head around some numbers.
Of course, it would be nice to factor in the couple trillions from the Iraq War. Are you sure it's only 2 trillions, and is that over 10-ish years? I thought it was more. Throwing another 200 billions per year into SS will bump our income figure up an additional $3,000 per year per SS recipient ($16,400/yr, not exactly a raise to sneeze at even if it doesn't seem like much).
(Score: 1) by kurenai.tsubasa on Tuesday January 17 2017, @04:33PM
Should have also thought to take a gander here [ssa.gov], which gives on the 2015 row $46,100 mean and $29,000 median compensation which doesn't match my figure at all.
(Score: 2) by Kromagv0 on Tuesday January 17 2017, @04:24PM
I've always like this java script monstrosity [usdebtclock.org]. It actually provides sources if you hover over an item.
T-Shirts and bumper stickers [zazzle.com] to offend someone
(Score: 2) by Thexalon on Tuesday January 17 2017, @07:10PM
Actually, there's an even bigger number that should be mentioned here: approximately $19.2 trillion. Money given to the Defense Department that they can't account for: $6.5 trillion [cnn.com]. That's right: about 1 in 3 dollars of the national debt is money that went to the Pentagon and then disappeared with nobody able to figure out what happened to it. But for some reason, budget hawks like Paul Ryan are always focused on relatively small line items like the $28 billion given to the Department of Energy to do silly little things like securing our nuclear facilities and doing physics research.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 2) by AthanasiusKircher on Wednesday January 18 2017, @02:46AM
But for some reason, budget hawks like Paul Ryan are always focused on relatively small line items like the $28 billion given to the Department of Energy to do silly little things like securing our nuclear facilities and doing physics research.
And even that is huge compared to other initiatives or departments that tend to get the attention of budget folks in Congress. For example, the NEA, which is perennially on the chopping block, despite the fact that its budget is around ~$150 million. And usually the criticisms are based on a few individual grant decisions generally amounting to tiny amounts of even that small budget item.
I know some may argue about the politics of the artists are funded, but rarely do we see any proposals for making art funding better, even if it's refocused. In the US, we spend about 50 cents per capita on the NEA. Many European countries have figures more like $20-25 per capita (40 or 50 times as much).
I'm not necessarily arguing in favor of this -- just pointing out the relatively insignificant budgetary items that can occupy days of debate. We focus on items that constitute around 0.01% of the budget while ignoring the "elephant in the room" which is mostly "defense" (i.e. war, in non-newspeak terms) spending.