The Securities and Exchange Commission released a report on the method for how credit rating agencies get their business, something mandated by the Dodd-Frank financial reform law. And just as expected, it showed a serious conflict of interest in the current business model, where rating agencies are paid by the issuer of securities, and have to compete for their business, adding all sorts of distortions into the kinds of ratings they give. A better model, envisioned by Dodd-Frank at first but then put into this study, would allow an oversight board to dole out to qualified ratings agencies the securities that would get rated, removing the conflict of interest entirely.

The Senate, unable to come up with a schedule for amendments, blocked the cybersecurity bill today in an outcome that, despite being a result of Republican obstruction, satisfied Internet activists who had been urging a no vote.

The Senate easily advanced a motion to proceed on their version of a cybersecurity bill yesterday, by an 84-11 vote. Clearly this bill, a separate version of which has already passed the House, has a broad degree of support. As if on cue yesterday, the head of the National Security Agency Keith Alexander, warned about increasing cyberattacks on the US, which this bill would purport to stop.

Wireless carriers have experienced an “explosion” in surveillance over the last five years. Carriers have responded to at least 1.3 million demands for “subscriber data” during the last year and have been “turning over records thousands of times a day in response to police emergencies, court orders, law enforcement subpoenas and other requests,” according to Eric Lichtblau of the New York Times.

Al Franken has a video out informing borrowers that they may be contacted if they’re eligible for a cash payment from a wrongful foreclosure or the opportunity to refinance or get a principal reduction on their loans. It’s more of a public service announcement than anything. Meanwhile, Tammy Baldwin joined others in criticizing Wisc. Gov. Scott Walker for proposing to divert settlement funds to the state treasury.

Another researcher has come out complaining about how a religious right “expert” distorted her work to stigmatize the lgbtq community.

Hot Coffee, the fast-paced, info-packed exploration of tort reform exposes the real story behind Stella Liebeck, who sued McDonalds after being badly burned by spilled coffee, an incident which wrongly entered the collective consciousness as a prime example of a “frivolous” lawsuit. First time director Susan Saladoff, a civil litigator with 25 years of experience, uses the McDonalds coffee case as the starting point and from there builds a strong case that tort reform, binding arbitration and non-economic damage caps subvert justice and benefit big business.

Sit down for this one. Because you’re just not going to believe it. It seems that the more credit rating agencies are paid by corporations and banks to rate their debt, the more favorable ratings they hand out! This goes against everything I know about the untainted, incorruptible hand of the free market, and comes very close to shaking my faith in the credibility of the rating agencies.

It turns out that the Justice Department is not only concerned with Standard and Poor’s but the entire credit rating agency industry, it appears. The reported investigation into the ratings of mortgage backed securities during the housing bubble is centered on S&P, but not limited to them.

The Senate Banking Committee claims to be gathering information on S&P, but as Manns says this is an industry-wide phenomenon. Long ago, the government gave the rating agencies a good deal of power, and now they’re using it to protect their core business. I’d love to see Congress defy the rating agencies and reduce their role in bond deals (through mandating AAA securities in them), but I don’t see it happening.