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SputnikNews reports
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: 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.