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This Ratings Agency's Fall Could Be Hugely Profitable

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William (Bill) Patalon III is the Executive Editor and Senior Research Analyst for Money Morning. Before he moved into the investment-research business in December 2005, Bill spent 22 years as a journalist, most of it covering financial news as a reporter, columnist, and editor that included stints withGannett Co. Inc., and The Baltimore Sun.

Today Bill is the creator and editor of Private Briefing. With his latest project, he takes you "behind the scenes" of his established investment news website for a closer look at the action. Members get all the expert analysis and exclusive scoops he can't publish... and some of the most valuable picks that turn up in Bill's closed-door sessions with editors and experts.

To read more about Bill Patalon and his publications visit MoneyMapPress.com.

I was excited to get news on Friday that the U.S. Department of Justice was breathing down the neck of ratings agency Moody’s Corp. The two parties are “negotiating” over allegations of fraud relating to mortgage bonds that Moody’s rated AAA from 2004 to 2007. As we all know, the bonds (and their sterling ratings) turned out to be beer-battered, deep-fried garbage in most cases.

Moody’s shares had been coasting along near a 52-week high of $110, but they gapped down to $102.60 on the news and haven’t come back since.

They’re not likely to, either.

I’m thinking Moody’s has a ways to go before it gets out of these woods, meaning its stock could sink a lot lower.

We’ll all get the chance to make some money on this lemon, but first let me answer some burning questions about this company that I don’t see anyone else asking, like why Loretta Lynch and the Justice Department picked now, of all times, to turn up at Moody’s front door.

And the identity of the famous investor that stands to get a good burning on this news…

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