The rating actions follow Fitch's recent warnings that it may cut the top "AAA" ratings of MBIA, Ambac Assurance Corp, FGIC Corporation and Security Capital Assurance.

Fitch has said it is concerned about the bond insurers' exposure to deteriorating mortgage-related investments.

Analysts have said the insurers' exposure to subprime mortgages may reaccelerate the U.S. credit downturn.

Are they talking about this credit crunch:

The value of credit card accounts at least 30 days late jumped 26 percent to $17.3 billion in October from a year earlier at 17 large credit card trusts examined by the AP. That represented more than 4 percent of the total outstanding principal balances owed to the trusts on credit cards that were issued by banks such as Bank of America  and Capital One  and for retailers like Home Depot  and Wal-Mart .

At the same time, defaults - when lenders essentially give up hope of ever being repaid and write off the debt - rose 18 percent to almost $961 million in October, according to filings made by the trusts with the Securities and Exchange Commission.

They and the other rating agencies are dragging this out as long as possible.

THE WORLD IS CRASHING AND THE STOCK MARKET KEEPS CLICKING ALONG

Commercial RE-Westfield can't sell malls in Australia and New Zealand

Residential RE-that horse has been beaten pretty good.

Subprime and Alt A mortgages-that's a given

Insured Residential Mortgages-that's a relatively new one

Credit Cards and Auto Loans-enough said there

Commercial Mortgages-just take a look at the CMBX

Municipal Bonds-see rising deficits and CR's post in insured RMBS

Is there any asset class that is doing well or has a positive outlook?

c-l-, North Carolina real estate is doing well, according to Sebastian. I think that that is indicative of a very bright 2008 for us all, in spite of your list of economic travails, sir.

MBIA’s RMBS portfolio totaled $22.8 billion at the end of September.

A ratings downgrade at MBIA would be a dire outcome for the mortgage industry

This doesnt bode well for Citi!

The originate-and-sell business model "encouraged reckless lending" that triggered the current mortgage morass, Mr. Cassidy said. Keeping loans on banks' books will help avoid future meltdowns that could torpedo years of profits.

Meantime, changes being wrought to the banking business model are quickly becoming apparent. Citigroup has seen the amount of loans and leases it holds in inventory — and doesn't plan to sell to investors — increase to about $697 billion at the end of September, up about 9 percent over six months, according to data from IRA.

The bank's portfolio of loans and leases it would like to sell, but has yet to do so, more than doubled over the same six-month period to about $42 billion at the end of September.

At J.P. Morgan Chase and Bank of America, loans and leases held for inventory increased by 11 percent and 9 percent, respectively, in the six months ended Sept. 30, according to IRA.

Commercial and industrial loans at commercial banks in the U.S. have risen about 20 percent since the start of the year to about $1.43 trillion this month, according to Federal Reserve data.

That rise has come at the same time as a fall in commercial-paper issuance by off-balance-sheet conduits typically sponsored by banks. These vehicles issue short-term commercial paper to purchase debt such as corporate receivables, mortgages and auto loans, capturing the difference in rates between the two. The amount of this paper outstanding fell to $763 billion as of Dec. 19 from a peak of almost $1.2 trillion in August.

Anon 11:14 with the real threat to the economy - that banks will be unable to lend at previous volumes due to the necessity of keeping more loans in the portfolio.

If that's the case, buying up a nice big chunk of TWM is probably a darn good idea.

Tanta, is Citi exposed here?

CITICORP MORTGAGE SECURITIES INC - Current report filing (8-K) EXHIBIT INDEX

Citicorp Mortgage Securities, Inc.
Distribution Date Statement to Certificateholders
Remic Pass-Through Certificate

Series Name: CMSI 2005-02

IA3 Retail, Insured 5.50000% 5.50000% $15,138,701.00 172973Q85

Can Tanta or someone explain this retail relationship here from the Fitch Downgrade (please)???

Re: Fitch
Citicorp Mortgage 2005-2 Total IA-3 172973Q85

SEC Info - Citicorp Mortgage Securities Inc - 8-K - For 10/25/05

CITICORP MORTGAGE SECURITIES, INC.
(Packager and Servicer)
(Issuer in Respect of the REMIC Pass-Through Certificates Series 2005-02)

IA3 Retail, Insured 5.50000% 5.50000% $15,138,701.00 172973Q85

Anonymous,

If you're going to post stuff and ask questions, please pick an alias so that both can be addressed properly.

OT, from footnoted.org:

"A quick skim of recent 10-Ds turns up this fascinating exhibit filed last week by BMW Vehicle Lease Trust 2007-1. Because this is a relatively new trust, there’s not enough history to go back a year. But going back one month shows a small, but potentially dangerous trend: at the end of October, there was only 1 loan in this trust that was 90 days or more late. But by the end of November, that had risen to 30. Granted, it’s a small number, but it’s still a 30-fold increase from one month to the next. And it’s presumably in a segment of the economy that’s about as far removed from sub-prime mortgages as you can get."

Suspecting fraudulent appraisals, she gathered documents on the sales and took them to the F.B.I., the district attorney and local officials. With neighbors, she sued an investor who she said was behind the fraud.

Years later, there have been no arrests in the case. The residents ran out of money and dropped their civil suit after the investor filed a countersuit. “Our neighborhood is still in shambles,” Ms. Baugh said. “The properties deteriorated and have to be kept up by the city. They’re a health hazard.”

The swimming pools at the vacant sites are breeding grounds for mosquitoes and potential West Nile virus sources, she said.

Such cases are likely to multiply, said Constance Wilson, executive vice president of Interthinx, which develops fraud detection tools for the lending industry.

To Weather Helm (12.26.07 - 10:45 pm) -

Actually, if you're an investor in any of the bonds referred to here -- all of which are 'AAA' tranches from various wrapped deals -- you don't want a downgrade quickly. You want to get your payments, nothing more, nothing less; the minute the downgrades hit, you're holding a bond displaying a 'AAA' yield that you'd have to sell at a mezzanine price. That's where losses get real.

``So far, we have not seen a deal that causes me to start salivating.'' Buffett didn't say which firms contacted him.

What he also didn't say was that most of the deals gave him "indigestion" just to think about them.

I am now expecting a crash in all stock indices. Just FYI.
Sebastian | 12.27.07 - 2:34 am | #

Eh...Sebastian? You ok, buddy? If that's you...and I am not sure it is...what the heck would cause you to say something like that?

Unless you're having some sort of life event unrelated to the economy, I'm worried. When Sebastion goes negative, we're all pretty much staring at the abyss. Maybe he's just having a bad girl day. Hang in there Sebby. If you go to the dark side, we're pretty much without anybody singing the semi-happy song.

anonymous at 5.44 is doc holiday

"Too bad the audio was cut off, it was just starting to get interesting."

Reading his lips i think he was saying under 3 percent:-)

FFDIC,
Welcome to the global market. Just like social security and medicare in the public sectors, businesses and unions enjoyed the party and thought it could go on forever. Those days are gone and the dreams of working for 30 years, retiring and having everything in your life paid for until you get covered with dirt are history. And as for blaming only the GOP, sorry to say, it was a COUNTRY-WIDE (pun intended) party involving Dems too. (Ever hear of the Great Society?...the beginning of all of this mess). But then again, I guess it just "takes a village".

The possibility of the stiock market (as represented by the index names), outperforming the general American economy should not be discounted.

"So long as nobody gets overly jumpy there's no reason the stock market should go down even in a broad-based credit crunch and maybe a depression...ac"

06.2009

Shares of Countryfried today soared on the news that the currently defunct company's name was being considered for use by a Chinese US Strategic Buyout fund. Shares jumped 20% on the news.

Cheers,

Rigtsal, this statement of yours is 100% wrong:

" a segment of the economy that’s about as far removed from sub-prime mortgages "

Subprime is not an economic class. Although it clearly makes you feel better to believe "other people" fit the label of subprime, anyone with too much leverage is subprime.

Everyone has credit risk.. even people who lease bimmers. Sure, low-income people pay higher credit card rates.. but people who pull $200k a year as a lawyer are paying for boats, overseas time-shares, and bridge loans. Ever wonder where the phrase "It takes a genius to lose a trillion dollars" came from?

I have a horrid credit score, yet I'm current on my car loan - which is more than what BMW would charge me to lease an M3. I've checked. By extension, every person who's late on their BMW lease is.. more subprime than me? Doubtful.

that's why we need real forum accounts...

You get what you pay for. I could care less if everyone starts posting as Sebastian. Everyone has the same credibility here. As much credibility as one could assign to an anonymous person...very little. Every statement should always be judged on its contents and taken with a grain of salt.

Was does piss me off is the off topic rambling pages of shit that assholes like Doc Holiday and now one of the Anons is posting.