Republicans Use Old Scandals To Discredit SEC As Ratings Firms Come Under Fire

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Well, it looks like someone's been reading Crooks and Liars again, like Keith's staff. That said I'm glad to see at least one person in the media is talking about the games the Republicans are playing rather than chasing after the pornography story. As Karoli pointed out:

On a weekend where negotiations are moving ahead to get to a vote on financial regulation Monday, Issa's latest effort to manufacture scandal is just a cynical ploy to manipulate public opinion. It's a little like the "death panel" controversy, or the "Goldman Sachs gave more money to Obama than anyone else" controversy. The goal is to turn public opinion away from efforts to rein in what is completely out of control, water it down more than it is already, and pay off the Republican paymasters of Wall Street.

Keith and Ezra Klein discussed the hearings Carl Levin is holding taking a look at the ratings firms -- Former credit-rating firm executives say they were told to cut corners:

Former officials at the nation's major credit-rating companies told a Senate panel Friday that a pressure-cooker culture fostered by top executives encouraged them to cut corners so their firms could handle an exploding volume of deals and keep raking in profits during the bubble years.

The testimony backs the findings of a probe by the Senate Permanent Subcommittee on Investigations. The probe concluded that these firms used outdated models, gave high ratings to flimsy investment vehicles and waited too long to downgrade those investments in part because they were unduly influenced by their Wall Street clients and their own quest to make more money.

Investors relied on the ratings companies to impartially gauge the risk of complex deals tied to home mortgages. But the firms failed to do that, and the ensuing downgrade of hundreds of mortgage-backed securities in mid-2007, "shocked financial markets," and "the financial crisis was on," said Sen. Carl M. Levin (D-Mich.), head of the Senate panel.

Financial regulatory overhaul legislation before Congress aims to increase oversight of the ratings industry to prevent such a collapse in the future. Read on...

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