Topic: Cdos

The U.S. government is suing Standard & Poor's for $5 billion, alleging the agency knowingly gave high ratings to risky subprime mortgage packages. The hosts argue that S&P is being used as a scapegoat while the bankers who created the toxic financial instruments face no criminal charges. Personal losses from the 2008 housing collapse are cited during the critique.

Moody's Investors Service attributed the misrating of complex debt vehicles (CDOs) during the subprime mortgage crisis to a software coding error. The agency reportedly knew about the glitch, which inflated ratings to AAA status, for a full year before the information was made public.