{"id":183835,"date":"2012-11-05T21:11:00","date_gmt":"2012-11-06T02:11:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2012\/11\/05\/this-is-huge\/"},"modified":"2012-11-05T21:11:00","modified_gmt":"2012-11-06T02:11:00","slug":"this-is-huge","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2012\/11\/05\/this-is-huge\/","title":{"rendered":"This is Huge"},"content":{"rendered":"

A Judge in Australia has just found Standard and Poors liable for bad investments<\/a>:<\/p>\n

I\u2019d never heard of Australian federal judge Jayne Jagot before today, but she\u2019s my new favorite jurist, thanks to her decision<\/a> in a recent court case which was brought against ABN Amro and Standard & Poors.<\/span>

<\/span>The coverage of the decision (Quartz<\/a>, FT<\/a>, WSJ<\/a>, Bloomberg<\/a>, Reuters<\/a>) concentrates, as it should, on the hugely important precedent being set here: that a ratings agency \u2014 in this case, S&P \u2014 is being found liable for losses that an investor suffered after trusting that agency.<\/span>

<\/span>S&P is appealing the decision, which runs to an astonishing 635,500 words, or almost 1,500 pages: it\u2019s literally longer than War and Peace. At this point, it\u2019s fair to assume that Jagot is one of the world\u2019s foremost experts on structuring and rating CPDOs \u2014 crazy derivative instruments which had a brief moment of glory at the end of 2006 before imploding spectacularly during the financial crisis. And helpfully, her decision begins with a 56-paragraph summary of her findings, which lays out exactly how culpable and incompetent S&P really was.<\/span><\/p><\/blockquote>\n

Needless to say, I have not<\/b> read the whole opinion, though I did look at the summary, which was eye glazing on its own.<\/p>\n

The substance of this ruling is that:<\/p>\n