What the Fed: Rating Agencies Win By Default

As the TALF plan cranks up the volume from a measly $200 billion to $1 trillion, the big winners look to be the ratings agencies.

TALF, aka the Term Auction Lending Facility, was created to help the companies and businesses that couldn't get money from the credit markets -- the money they in turn lend to consumers. Lenders can put up a wide array of questionable collateral to borrow this money.

This is where the ratings agencies enter the picture. The government insists it is working to minimize the risk to taxpayers and is hiring companies like Moody's(MCO Quote), Fitch(FIM.FP Quote) and Standard & Poor's, which is owned by McGraw-Hill (MHP Quote), to check out the collateral and deem it worthy.

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