Credit rating agencies again lagging events?

Credit rating agencies have been beaten up pretty thoroughly in the credit crunch. Many would say they have been discredited. If only they hadn't rated all those subprime-backed CDOs AAA! In the wake of the Lehman Brothers bankruptcy, Advisor Perspectives notes that on Friday, just before the pyrotechnics began, Standard & Poor's had Lehman's operating groups rated A+. At an event, Standard & Poor's analyst Scott Sprinzen said that "we don't expect Lehman to fail." And: "The underlying business at Lehman is doing pretty well." And: Its "basic business franchise is not impaired." It also had Merrill Lynch rated similarly high, just a notch below Morgan Stanley, and two notches below Goldman Sachs. They did not anticipate the possibility of extraordinary events, or "accidents."  

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