Moody's Assigned AAA Ratings Like `I Love Lucy,' Angelides Says
Moody’s Corp. ignored signals that housing prices would decline and assigned triple-A ratings to mortgage securities like characters from “I Love Lucy,” said Phil Angelides, chairman of the Financial Crisis Inquiry Commission.
The bond-rating firm “said in October 2006 there was going to be a crash in housing in 20 major metropolitan areas, half the housing market, yet they went ahead in 2007 and rated half a trillion in mortgage securities triple A,” Angelides said in an interview with Bloomberg Television after a hearing today. “They just kept chugging along. It’s like that ‘I Love Lucy’ episode where she’s working on the chocolate factory, they just couldn’t get the chocolates coming down the conveyer belt fast enough.”
Angelides said he wasn’t satisfied with Warren Buffett’s response to questions about the responsibility shareholders and boards of directors have for companies taking unreasonable risks. Buffett’s Berkshire Hathaway Inc. is the largest shareholder in Moody’s.