Britney’s Career Placed on ‘Celebrity Watch’ at S&P: “She May Be Less Popular than

S&P Flags Goldman, Lehman By JED HOROWITZMarch 22, 2008; Page A15 Standard & Poor’s, in a continuing sign of loss of confidence in investment banks’ profitability, Friday put Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc. on negative outlook, lowering them from stable. Although S&P didn’t change the senior-debt ratings from AA-minus for Goldman and A-plus for Lehman Brothers, it brought its view of the likelihood of a precipitous decline in profits at the Wall Street firms during the next two years to the same negative levels it previously assigned to Merrill Lynch & Co. and Morgan Stanley… —The Wall Street Journal

Gosh. That’s a shock.

Who would have thought something might be amiss, credit-wise, at two of the nation’s biggest investment banks—besides, oh, every sentient being on Earth including my dog Charlie, I mean.

Does S&P not read the papers?

Do they not know what has been going on for the last fifteen months, since HSBC first signified something might be dreadfully wrong in the mortgage world by writing off billions of dollars of sub-prime loans that it had only recently written?

Apparently they do not, for only now, even as the seeds of a recovery are being planted and watered by an eager Federal Reserve, does this particular rating agency start to worry about what might be lurking inside Goldman Sachs and Lehman Brothers, two of the bigger mortgage players in existence.

Most amusing of all is S&P’s excuse for its delayed crisis-response: “the likelihood of a precipitous decline in profits” at both firms…nearly a week after both firms reported a precipitous decline in profits.

Ironically, of course, both Goldman and Lehman’s bottom lines were not nearly as bad as Wall Street’s Finest had begun to fear. And naturally both stocks rallied.

So what’s next?

Will S&P be putting CIT Group—which hit the fan last week—on some sort of “Companies We Are Feeling Less Optimistic About” List?

Are they going to downgrade Thornburg Mortgage to “Fretful ?

Cut the short-term paper on Countrywide Financial to “Worrisome”?

Slash Enron to “Might Not Survive”?

It’s a good thing S&P doesn’t make its living, say, rating pop stars. Otherwise, the headline of this piece might not be something we here at NotMakingThisUp did, in fact, make up.

Jeff Matthews I Am Not Making This Up

© 2008 Not Making This Up LLC

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. The commentary in this blog in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.