S&P's To Blame

A debt crisis once was created
By avarice run unabated,
As the market was flawed
By schemes to defraud
In bonds that were triple-A rated.

Now Justice may fin'lly report
That they're taking the raters to court
For the role of those chaps
In the housing collapse,
In which they provided support.

Ratings Week V: the Finale

Though one may have felt left in the lurch
When "triple-A" bonds lost their perch,
The best self-defense
Is still common sense,
And one's own, independent research.

Ratings Week IV

Barney Frank made a stern ultimatum:
"Bond arrangers and the analysts who rate 'em
Should sever relations
That involve compensation
Since the agencies serve those who pay them."

Ratings Week I

A CDO analyst from Moody's
Confessed: "I've neglected my duties.
We'll soon be downgrading
Some triple-A ratings
When everyone sees that we blew these."  

One Bad Apple, or a Rotten Bunch?

There's a time-honored CDO dictum,
When a firm's charged with fleecing a victim:
Every other firm too
Will conduct a review
Of the tranches it sold, and who picked 'em.

The Goldman-Paulson Case: Pro & Con

Institutional buyers of debt
Are big boys and deserve what they get,
But if some of those boys
Knew who cobbled their toys,
They may not have invested, peut-être?

Overheard at the Desk of "Fabulous Fab"

"This CDO's fit, if you please,
For a carry trade like IKB's,
With a mortgage portfolio
Hand-picked, as I told you,
By investors with deep expertise."

Abacus 2007-AC1

Said John Paulson, "Subprime will tank,
And I'd like to take that to the bank."
Said Goldman, "We'll fashion
A short you can cash in
From the Kool-Aid our dumb clients drank."

Overheard on a CDO Desk

"When wall street was frothy and cheery, 
We practiced the greater fool theory:
We bundled the crap
To sell to some sap, 

But now buyers are wiser and weary."

(Thanks to guest contributor Andy Golub)