The Raters Are Fine

As this recent WSJ article points out, the rating agency business are performing phenomenally well, riding the wave of bond and debt issuance. Rating agency stocks are the essential beta stock, a good way for investors to express a view of the debt markets. Interesting to note that despite the wide spread criticism of their business model, it has not changed and seems less likely than ever to do so.

In the "Oh No They Didn't" Category

The New York Times Dealbook reports that S&P alleges that the US government's lawsuit against the rating agency for fraud was retaliation for the downgrade of US Treasuries.  S&P cites in particular a conversation that former Treasury Secretary Geithner had with S&P's Chairman, Harold McGraw, III.  Could Geithner have called Attorney General Eric Holder to direct a U.S. Attorney to file suit against S&P solely for the downgrade?  How would this compare to Bridgegate?