S&P analysts channel Talking Heads, foretell subprime meltdown

Unless you live on another planet you likely know that the U.S. Department of Justice is suing ratings giant S&P for allegedly presenting an over-optimistic view on mortgage securities. And while it will obviously take some time before the court presents its verdict, anyone in search of insight (or entertainment) would be well advised peruse the 119-page complaint, chock-a-block with S&P employee emails written around the cusp of the subprime mortgage collapse, some in uncharacteristically frank language.

You can find the complaint here on the Wall Street Journal‘s Law Blog.

The one that caught our eye was composed on March 9, 2007 by an employee identified only as “Analyst D” who provides an artful rewriting of the Talking Heads’ classic ‘Burning Down the House’ to express his view of the housing market:

“Watch out
Housing market went softer
Cooling down
Strong market is now much weaker
Subprime is boiling over
Bring down the house
Hold tight
Cdo biz has a bother
Hold tight
Leveraged CDOs they were after
Going – all the way down, with
Subprime mortgages
Own it
Hey you need a downgrade now
Free-mont
Huge delinquencies hit it now
Two-thousand and six-vintage
Bringing down the house”

Watch the Talking Heads video for ‘Burning Down the House’ below:

Rio Tinto subsidiary abandons plans for $4B titanium plant in Quebec

MONTREAL — Rio Tinto’s iron and titanium subsidiary has abandoned plans to build a $4-billion plant in Becancour, Que., that would have created up to 400 jobs.

The decision comes amid a collapse of titanium prices and follows the replacement of the global mining giant’s chief executive.

Rio Tinto Iron & Titanium said the move stems from its decision to suspend pre-feasibility studies under way in Canada and Madagascar.

Managing director Jean-Francois Turgeon said the company needs to reduce costs among weaker market conditions, despite the progress made on its TO4 project designed to expand mining and smelting capacity in Canada, Madagascar, South Africa and Mozambique.

Becancour was selected because of its access to cheap energy and proximity to a port.

A company spokesman said the decision won’t affect operations in Sorel or Havre-Saint-Pierre, Que.

It says this is unrelated to a five-year $800 million project that was announced in 2011 to extend the life of a mine until 2050 and modernize the Sorel-Tracy metallurgical complex.

The project known as TiO2050 will expand mining to seven from five days a week, creating 70 new jobs.

The subsidiary of the London-based mining giant produces titanium dioxide feedstocks, high purity iron, steel and metal powders. Tiitanium dioxide is the world’s most commonly used white pigment, and adds opacity to paper, paints and plastics.

Researchers warn of cyber flaws in Honeywell control systems

SAN JUAN, Puerto Rico (Reuters) – A widely used system for controlling electricity, heating and other systems inside buildings remains vulnerable to attacks over the Internet, despite warnings from U.S. officials, researchers said on Tuesday.

Japan protests to China after radar pointed at vessel

TOKYO (Reuters) – A Chinese navy vessel aimed a type of radar normally used to aim weapons at a target at a Japanese navy ship in the East China Sea, prompting Japan to protest, Japan’s defense minister said on Tuesday, an action that could complicate efforts to cool tension in a territorial row between the rivals.

Former “Ground Zero mosque” imam accused of pocketing donations

NEW YORK (Reuters) – The head of a proposed mosque that was to be built near the site of the September 11, 2001 attacks in New York City was sued on Tuesday and accused of squandering millions of dollars in donations on lavish lifestyle perks for himself and his wife.

Apple to lose iPhone trademark in Brazil: source

RIO DE JANEIRO (Reuters) – Brazil’s copyright regulator will strip Apple Inc of the right to use its iPhone trademark in Latin America’s biggest market and granted the trademark to a local company that registered it first, a source familiar with the decision said on Tuesday.

Wall Street roars back after selloff

NEW YORK (Reuters) – Stocks rallied on Tuesday as earnings came in stronger than expected and investors sought bargains a day after the market’s biggest drop since November.