A Little Piece Of The Shitpile

This is pretty pathetic. Bloomberg (03.11.08):

"Even after downgrading almost 10,000 subprime-mortgage bonds, Standard & Poor's and Moody's Investors Service haven't cut the ones that matter most: AAA securities that are the mainstays of bank and insurance company investments.

None of the 80 AAA securities in ABX indexes that track subprime bonds meet the criteria S&P had even before it toughened ratings standards in February, according to data compiled by Bloomberg."

Moody's, S&P Defer Rating Cuts on AAA Subprime, Hiding Losses

"A bond sold by Deutsche Bank AG in May 2006 is AAA at both companies even though 43 percent of the underlying mortgages are delinquent."

Hard to believe these guys were that stupid, eh?

Their response has been to absolutely panic. "Banks are even demanding collateral to support investments in Treasury bonds - which are backed by the US government."