The revelation that the U.S. Justice Department is now investigating S&P’s ratings of pools of mortgage backed securities is perhaps totally unrelated to S&P’ recent downgrading of the U.S. government’s credit worthiness, but the timing does suggest otherwise. Assigning the coveted AAA ratings to pools with sub-prime mortgages (which individually would most likely have been below investment grade) provided many investors with confidence that was unfounded.

Sorry, but I liken S&P’s recent actions to the SEC’s, when their failure to catch Bernie resulted in them getting tough with the likes of Goldman Sachs.

Whether or not the government’s investigations are in response to what S&P did, it’s probably still justified and perhaps long overdue.