The Bishop and the Butterfly: Murder, Politics, and the End of the Jazz Age

    Maybe the Downgrade was a pre-emptive strike

    By Flavius on Fri, 08/12/2011 - 11:24pm |

    Suppose S&P knew it had some sub-prime skeletons which it wanted to protect from any investigation. The Downgrade did that since now any investigation could be characterized as Obama's revenge.

    What sort of skeletons?

    Consider the initial period of minimal payments in sub-prime loans..

    Suppose that wasn't really designed as a "come-on"  to entrap naive buyers. Suppose instead its purpose was to facilitate, say S&P,  providing a triple A to the derivatives based on this junk. Pretty hard for Stuffy & Pompous to do that if they started defaulting immediately.

    But no early payments =d no early defaults. which =d a window during which profitably to flog  the derivatives to some naive investors .

    Wouldn't S&P have understood that game?  Not if the unholy alliance of realtors and banks made it worthwhile not to understand.

    But suppose there are some emails explaining this collusion ... That would make it very useful if Justice were prevented from investigating because it would seem like Obama' s revenge for the Downgrade.

    But I guess I've just become a conspiracy theorist in my old age.

    Comments

    To add to any conspiracy theories which might develop it was reported on Bloomberg that 66 executives of S&P very recently bought stock in the company.

    However one slices and dices the downgrade, it happened on Obama's watch, and he cannot escape some blame for it, fair or not. So ultimately the downgrade was a shot at Obama, and, I think, Dodd-Frank, the bane of any S&P client.


    by Oxy Mora on Fri, 08/12/2011 - 11:51pm

    Yeah I think so too.

    They would not do this to Bush.

    But such is life!


    by Richard Day on Sat, 08/13/2011 - 4:07am

    There's something fishy about it, I just haven't figured out yet what it is. I don't know if it is as innocent as the pendulum swinging too far the other direction, or something more malevolent. I tend to think it is probably the latter. I've seen the head guys trying to explain their position, and I'm just not buying it.

    As far as conspiracy theories go, this is not a bad one. Ha!


    by stillidealistic on Sat, 08/13/2011 - 1:19am