Banks Find S.& P. More Favorable in Bond Ratings - NYTimes.com
Actually, it's a bit more dramatic than that. The rating agencies gave AAA ratings to mortgage backed bonds (Residential Mortgage Backed Securities, or RMBS) that were in fact about as far from AAA as any investment could get. They were worse than junk bonds and turned out in many cases to have been completely worthless because the mortgages that the bonds represented were issued to people with no money, no job, no assets, no down payment, and no chance that they would make mortgage payments. And now, here we go again:
"S.& P. has been giving higher grades than its big rivals to certain mortgage-backed securities just as Wall Street is eagerly trying to revive the market for these investments, according to an analysis conducted for The New York Times by Commercial Mortgage Alert, which collects data on the industry. S.& P.’s chase for business is notable because it is fighting a government lawsuit accusing it of similar action before the financial crisis."