Great, boys, thanks for showing up. McGraw-Hill, parent to Standard & Poor’s, announced on Monday that it received a Wells notice from the SEC related to S&P’s rating of a collateralized debt obligation from 2007 (yes, 2007).

In 2009, about a year after home values, 401(k) balances and best-laid retirement plans completely cratered, Standard & Poor’s Ratings Service announced it was reviewing how it assigned ratings to collateralized debt obligations because of “changing market conditions amid the deepening recessions in the U.S. and Europe.”

As we said then, good to know, but why it took them a year is anyone’s guess. It was, and is, instructive of regulation’s role in actually regulating markets (or not). The SEC was the enforcer; S&P was one of three rating agencies that enjoyed the fruits of government sanctioned (scratch, required) collusion in the blessings it bestowed.  Both failed, miserably.

As The Wall Street Journal noted at the time, hyper-regulation as a response to market failings is exactly the wrong thing to do. After all, they opined, it wasn’t the SEC that caught Madoff and his shameless and sociopathic crimes against the retirees with whom he was trusted. Quite the opposite; a strong case could be made for SEC as enabler. It was, in fact, the market that eventually exposed his misdeeds. The scarlet enabler label can also most certainly be applied to S&P and their (now laughably) “AAA-rated subprime mortgages,” a phrase that will forever redefine our concept of oxymoron.

All of this comes on the heels of a report released Friday from the Inspector General for the Federal Housing Finance Agency (FHFA), which found that Fannie and Freddie knew all along about the robo-signing that was taking place in mortgage departments across big banks, despite feigned shock when news of the practice broke.

Sen. Susan Collins, R-Maine, is calling for a “time-out from excessive regulation.” Given recent history with government and quasi-government bodies, I’m certainly inclined to agree.