1. S&P Gets Popped Better late than never, Holder. U.S. Attorney General Eric Holder shocked the market -- and the 5 Dumbest Lab, too, to be honest -- when he charged Standard & Poor's Monday with knowingly inflating its ratings on the subprime mortgage bonds that helped cause the 2008 financial crisis. The Justice Department alleges the company's desire to bolster its sales "led S&P to downplay and disregard the true extent of the credit risks" posed by the crappy securities it was blessing with triple-A ratings. Shares of S&P parent company McGraw Hill ( MHP) have dropped 19% since the government announced its allegations. Moody's, which saw its shares get equally smacked, and Fitch were not charged, although we can safely assume Holder will eventually turn his attention to S&P's competitors at some point. Come on, folks. It took the guy nearly half a decade to go after S&P for what he calls its "egregious" conduct. We can surely wait another few years for him to seek justice for the rest of the lot. Can't we? S&P typically charged customers $150,000 to rate a subprime mortgage-backed security. If a member of its sales staff lost a lucrative deal to a competitor as a result of a poor rating, then that employee was forced to submit a "lost deal" memo to his or her superiors. Of course, those salespeople -- we won't even bother to call them analysts because they were anything but -- won't be giving back their hefty bonuses for their so-called work during the credit bubble. And since this is a civil, not criminal, crusade, they have no chance of going to jail for their key roles in the country's financial collapse. But the company's current shareholders are obviously paying dearly for S&P's prior misdeeds judging by the stock's reaction. And if acting Associate Attorney General Tony West gets his way, they will surely get hit again. West said Tuesday the company could be liable for $5 billion in penalties "at the very least." For its part, S&P called Holder's lawsuit "meritless," despite a trove of emails clearly proving otherwise. "The fact is that S&P's ratings were based on the same subprime mortgage data available to the rest of the market -- including U.S. government officials who in 2007 publicly stated that problems in the subprime market appeared to be contained," company spokeswoman Catherine Mathis said to Bloomberg. Sing that tune all you want, Mathis, but chances are that defense is going to fail you. Our government's on-the-spot ineptitude is time-honored. Nevertheless, so is its ability to eventually arrive at the right answer, with Holder's lawsuit being the consummate case in point.