Those ratings agencies have been bad.

According to a Securities and Exchange Commission study, reported here, the agencies were assigning top ratings to junk investments, and the analysts knew exactly what they were doing. As a result, investors took a bath while agencies continued to make money. In other words, the agencies profited at the expense of investors.

The European Union plans to bring in tighter rules for the agencies but there is a more important question: where was the SEC when this was going on? The regulator is doing its level best to come out looking like a hero by putting out this report but the bottom line is that it is playing catch up.