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Many strings to S&P’s bow

Wading through the pages and pages of documentation associated with litigation stemming from the sub-prime mortgage crisis always throws up entertaining email exchanges between bankers. The infamous "Boy, that Timberwo[l]f was one shitty deal!" from Goldman Sachs’s Tom Montag has gone down in industry folklore, as have comments from the previously fabulous Fabrice Tourre.

Now that the US Department of Justice has a rating agency, Standard & Poor’s, in its sights it appears that ratings analysts can hold their own in the gut-wrenchingly-embarrassing-five-years-later stakes. Certainly Standard & Poor’s has form in this area following the Australian Federal Court ruling on the Rembrandt CPDO. Court documents in that case revealed internal slanging matches, with analysts accusing each other of being "a wuss" and "bending over in front of bankers and taking it".

The Department of Justice suit reveals a far more harmonious workplace that encouraged one employee, Analyst D, to email a song to his colleagues in March 2007 pointing out the weakness already evident in the US mortgage market. We will spare you the full horror here, suffice to say that it included gems such as "subprime is boi-ling o-ver", "CDO biz–has a bother" and "Hey you need a downgrade now, Freemont" to the tune of Burning Down the House by the Talking Heads. In a touching moment of self-realization the analyst hurriedly sends a second message that states: "For obvious professional reasons, please do not forward this song." However, he then follows this up with the rather desperate: "If you are interested, I can sing it in your cube."