S&P CEO Canned in Credit Downgard Aftermath, Replaced by Citibank COO

[PaleoMan]

And to think we used to mock the soviets for being ironfisted & ruthless. This is insane.

http://www.zerohedge.com/news/sp-board-fires-ceo-telling-truth-be-replaced-coo-citibank

Following years of pandering to client demands, and assigning trillions of dollars in fixed income securities with whatever rating money bought (among other things, a factor to the credit bubble and its subsequent implosion) S&P finally tried to do the right thing and tell the truth. However in this case it picked if not the worst, then certainly the most hypocriticial credit in the world to expose - the US itself. Sure enough two weeks after the downgrade, someone made the phone call and the CEO Deven Sharma is no more. As for the kick square in the gonads: Sherma will be replaced with the COO of...you know it... the bank which demanded tens of billions in secret Fed bailout loans itself, Citibank, and whose existence is inextricably tied to America not seeing any more downgrades ever again.

As the FT reports, "The McGraw-Hill board made the decision to replace Mr Sharma at a meeting on Monday, where it also discussed an ongoing strategic review." Alas, this is nothing but a case study of modern corporate reality in America: if you are not with the status quo, you are against it, and you are promptly booted out of it: anyone who does not share the visions of one glorious future built on ponzi schemes, houses of cards, and games of three card monte, will be promptly suicided, either physically or professionally.

[Moonlight J]

a two trillion dollar mathematical error is really tough to overlook in a job review

[SeaDogStat]

a two trillion dollar mathematical error is really tough to overlook in a job review

His calculator only had 10 digits in the LCD screen so you can't really blame him....

[Wonderboy]

This guy turned S & P into a national punch line. And you see something sinister in his dismissal?

[Judge Jude]

Are there still leading execs at any rating agency who still have jobs after the 2008 debacle?

They failed miserably at the exact thing they were assigned to do. They could have prevented or mitigated a lot of damage.

[PaleoMan]

This guy turned S & P into a national punch line. And you see something sinister in his dismissal?

Explain to me how the U.S. should be AAAA, other than the implied threat of our intimidating war machine? That is the national punch line. We haven't paid back a single cent of the accumulating principal since the early 1960s, while just stringing along heftier interest payments for decades. In fact, the AP came out with an article just the other day that Social Security will not be functionally solvent by 2017, due to the increased extractions made by distressed citizens. Putin, as strange as it sounds, wasn't far off when he called us parasites on the global stage, in that we can suck up goods and services at a discount rate & also recklessly export inflation to all corners of the world by wielding the reserve currency of the world in such an irresponsible manner.

[chancellor]

Explain to me how the U.S. should be AAAA, other than the implied threat of our intimidating war machine? That is the national punch line. We haven't paid back a single cent of the accumulating principal since the early 1960s, while just stringing along heftier interest payments for decades. In fact, the AP came out with an article just the other day that Social Security will not be functionally solvent by 2017, due to the increased extractions made by distressed citizens. Putin, as strange as it sounds, wasn't far off when he called us parasites on the global stage, in that we can suck up goods and services at a discount rate & also recklessly export inflation to all corners of the world by wielding the reserve currency of the world in such an irresponsible manner.

You're missing Wonderboy's point, I do believe. Your claim is his dismissal is Chicago politics writ large, vengeance for the downgrade of US debt. Wonderboy's point is S&P hosed up catastrophically when missing the entire derivative debacle in the mid to late 2000s.

I happen to see both points, but more WB's than yours here. I do think the Fed investigation of S&P - and only S&P - is highly suspicious and reeks of retribution. But that this CEO was irresponsible to the core for many years is even more true.

[PaleoMan]

You're missing Wonderboy's point, I do believe. Your claim is his dismissal is Chicago politics writ large, vengeance for the downgrade of US debt. Wonderboy's point is S&P hosed up catastrophically when missing the entire derivative debacle in the mid to late 2000s.

I happen to see both points, but more WB's than yours here. I do think the Fed investigation of S&P - and only S&P - is highly suspicious and reeks of retribution. But that this CEO was irresponsible to the core for many years is even more true.

I don't think it's merely relegated to the sphere of the Chicago sewer, in fact I think it goes alot higher than that, especially when a plutocrat like Warren Buffet sets his sights on your organization. Secondly, this CEO should not have survived the fallout of the AAA gold-plated mortgage security fiasco, so it's painfully ironic that this act of defiance was the last nail in the coffin for his employment.

[Erik]

Are there still leading execs at any rating agency who still have jobs after the 2008 debacle?

They failed miserably at the exact thing they were assigned to do. They could have prevented or mitigated a lot of damage.

The sense I get from Michael Lewis' "The Big Short" is that people who work at the ratings agencies are the people who aren't smart enough to work for an investment bank or hedge fund. They didn't understand what it was that they were rating. They only cared about getting more stuff to rate, as that's how they get paid.