What a joke...these ratings (and equity analyst) never fail to surprise, with their stupidity. There are some (jim chanos famous shortseller) who think that this time it will be different.....in that the ratings agencies will not be able to get away with, because the fallout from the cdo/abx/subprime debacle will be too big. Lawsuites will fly and the viablility of some of the ratings agencies will be in question (chanos is short moodys).
LONDON (Thomson Financial) - Standard & Poor's Ratings Services said the difficulties experienced by two of The Bear Stearns Cos Inc hedge funds will have no impact on the company's 'A+' rating.
bofiz, For millenia it has been the case that what has been done is what will be done and there is no new thing under the sun (irregardless what you might hear on television).
Four collateralized debt obligations worth about $3.1 billion and containing subprime mortgages from 2006, the kind that resulted in losses to two Bear Stearns Cos. hedge funds, may have their credit ratings cut by Fitch Ratings.
The CDOs are the $288 million Trainer Wortham First Republic CBO III issued in 2003 and managed by Trainer Wortham & Co.; the $400 million ACA ABS 2003-1 and $725 million ACA ABS 2003-2, both issued in 2003 and managed by ACA Management LLC; and the $1.7 billion Ipswich Street CDO Ltd. issued last year and managed by MFS Investment Management, New York-based Fitch Ratings said in separate statements today.
Indications that the average jill and joe are being affected.
"
A sluggish national economy is the cause of slowing tax collections, say Cordrey and other state budget officials. Every major tax has been affected. Sales tax collections grew at the slowest rate in more than four years. Consumer spending on appliances, home furnishing and other goods related to housing has been weak, according to the Census Bureau."
"So Bear doesn't put up a nickel today. Instead this is a time buying maneuver if I am reading correctly."
I am not sure I understand it correctly. Bear is proposing to take over 3.2B of loan to one of it's fund. So they pay the other party 3.2B to take over the loan, correct? And if the collateral does not fetch 3.2B, wouldn't Bear be in the hook to loss the defecient amount?
My wife couldn't believe the Northwest Florida Daily News piece was genuine, but from their Wikipedia page (a stub), they seem to be a real newspaper. Admitted it would pass in The Onion without comment -- illustration, vaguely outlandish names, the works.
The mind boggles at what Keith is going to do with it at HousingPanic when he finds it (and he will). I would suggest the take-away from the story is that things really are that bad.
Meanwhile, from a site that is supposed to be satirical, a bit of disturbing seriousness.
This is dropping the market. We may get to -200.
Margin calls (for now on CDO) I am sure will be coming.
What a joke...these ratings (and equity analyst) never fail to surprise, with their stupidity. There are some (jim chanos famous shortseller) who think that this time it will be different.....in that the ratings agencies will not be able to get away with, because the fallout from the cdo/abx/subprime debacle will be too big. Lawsuites will fly and the viablility of some of the ratings agencies will be in question (chanos is short moodys).
OT, but a humorous link, amidst all the gloomy excitement...Courtesy of housingbubble.com's newspage:
"Realtors attend worship service to pray for better market"
pray for a healthy real estate market
"Realtors attend worship service to pray for better market"
I hope, for their sake, that they have a thick rug. The vultures, disguised as dog's in bear's clothing, are on the case.
Hiss! Hiss! (That's the sound that vultures make)
I think they are a little late. All the rating companies will need to reevaluate the ratings they have on these CDO's.
Yal, it's out there now. Fitch's release proves that. It's just a matter of time before the prey starts to bleed out.
You hafta wonder if the newfound diligence over at Fitch has to do with the Fed spanking them. (Thanks,MOM)
http://www.federalreserve.gov/feeds/cp.html#61
There's no way you can put a happy face on watch negative.
It will be interesting to seewhere the ABX bottoms today.
You reap what you sow...
What goes around comes around...
The piper must be paid...
All those "old" aphorisms are still true even when people think "it's different this time".
There's gonna be a Whole lot of shaking going on! Bill Haley
EXTRA! EXTRA! READ ALL ABOUT IT!!
"Fitch to Close Barn Doors; Horses Reported Missing Weeks ago"
on the other hand ...
"Bear Stearns rating not impacted by its hedge fund difficulties - S&P", Hemscott, June 22, 2007.
John M., all: see update to original post.
bofiz, For millenia it has been the case that what has been done is what will be done and there is no new thing under the sun (irregardless what you might hear on television).
Tanta (4:12 pm), Works for me. But now put this in your pipe and smoke it ...
"Four CDOs With Subprime Loans May Have Ratings Cut", by Darrell Hassler, Bloomberg, June 22, 2007.
I laughed so hard. Thanks, Tanta and everyone.
A little humor makes the scent of burning junk bonds far less acrid.
Aha!
So Bear doesn't put up a nickel today. Instead this is a time buying maneuver if I am reading correctly.
So Fitch loves BSAM as long as BSAM is willing to throw clients to the wolves? Is that what the Fitch statement says?
States' revenue growth sluggish.
States' revenue growth sluggish - USATODAY.com
Indications that the average jill and joe are being affected.
"
A sluggish national economy is the cause of slowing tax collections, say Cordrey and other state budget officials. Every major tax has been affected. Sales tax collections grew at the slowest rate in more than four years. Consumer spending on appliances, home furnishing and other goods related to housing has been weak, according to the Census Bureau."
"So Bear doesn't put up a nickel today. Instead this is a time buying maneuver if I am reading correctly."
I am not sure I understand it correctly. Bear is proposing to take over 3.2B of loan to one of it's fund. So they pay the other party 3.2B to take over the loan, correct? And if the collateral does not fetch 3.2B, wouldn't Bear be in the hook to loss the defecient amount?
From Doomsayers link:
We are helpless people turning to a helpful God,
Oh yeah. You got the first part right, ayway.
Every major tax has been affected.
Man, I hate being right. The vicious circle is really picking up steam these days. Thanks, vader!
xofruitcake,
I think the answer is yes. I don't get what they meant earlier by saying they are only exposed 35mm.
DoomsayerRenter (3:50 pm),
My wife couldn't believe the Northwest Florida Daily News piece was genuine, but from their Wikipedia page (a stub), they seem to be a real newspaper. Admitted it would pass in The Onion without comment -- illustration, vaguely outlandish names, the works.
The mind boggles at what Keith is going to do with it at HousingPanic when he finds it (and he will). I would suggest the take-away from the story is that things really are that bad.
Meanwhile, from a site that is supposed to be satirical, a bit of disturbing seriousness.
"Well It's 1 2 3 4, Take the Elevator", Wonkette - online DC gossip, June 22, 2007.
Is Tanta related to Tonto?
Tanta was born in April, Tonto was born in October?
Just curious.