Andrew Cuomo Investigating Citigroup (NYSE:C), Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), Bank of America (NYSE:BAC), others, Over “Misleading” Ratings Agencies

Andrew Cuomo has initiated another investigation, this time into eight banks, which include Citigroup (NYSE:C), Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), Bank of America (NYSE:BAC), UBS, Deutsche Bank, Credit Agricole and Credit Suisse.

This is one of the more stupid things I’ve seen a politician do in the banking crisis, and it’s so obvious that Cuomo is just doing this in this particular case in preparation for his run for governor, that it could possibly come back to haunt him. I hope it does, as it’s a tremendous waste of time and resources for something that very dubious.

What Cuomo is doing this time around is making it look like all these banks fooled the ratings agencies: Standard & Poor’s, Fitch Ratings and Moody’s Investors Service, in order to gain favorable ratings for mortgage packages which were very risky.

The problem with this picture is the assumption the rating agencies were a bunch of dolts who knew nothing that was going on. It’s highly likely they worked together with the banks in providing the higher ratings.

The idea they were deceived by all these banks in numerous packaged-mortgage deals is one of the biggest stretches I’ve ever seen.

Why this makes no sense, is because it makes no sense. This is completely politically and career motivated by Cuomo, and the reason he could get away with it in the short term is he’s on a fishing expedition, and when you deal with this many companies in numerous deals, it’s quite possible you can find something that may look a little off or is spun to look shady.

But when you consider the ratings agencies worked closely with the banks, and they’ve been rating this types of products for some time, it’s hard to believe Cuomo is attempting to paint a picture of deception, when in fact they were probably all working together to get the best ratings they could.