From Business Day:
When the housing market was on the road to nowhere in 2007, one ratings analyst found an unlikely muse: the post-punk band Talking Heads.
The analyst wrote a parody of the rock group’s 1983 hit, “Burning Down the House,” and emailed it to friends. His version of the song ended up in a 128-page lawsuit that the US Department of Justice has filed against rating agency Standard & Poor’s.
According to the $US5 billion lawsuit, the unidentified S&P analyst, known in the complaint as “Analyst D,” later sent a video of himself singing and dancing to his song while coworkers watched and laughed.
His version of the song begins:
“Watch out.
Housing market went softer
Cooling down
Strong market is now much weaker
Subprime is boiling over
Bringing down the house.”
Shortly after sending around the email, the analyst told his colleagues not to forward the song, but added: “If you are interested, I can sing it in your cube ;-).”
…For McGraw-Hill Companies, the parent company of the rating agency, the lawsuit is no laughing matter. The news that the government and several state attorney generals were going to sue S&P and McGraw-Hill over its alleged faulty rating of mortgage securities sent the company’s stock down about 13.8 per cent on Monday.
And who can forget that quote of the decade by another S&P analyst that a certain product could be “structured by cows” and they would rate it?
S&P must be a boring place to work these days.
In fairness, I reckon the CRAs have done a better job since. S&P must be a very boring place to work these days.
