Yawn! Already priced into the market.

This is no big deal, downgrading this shit, as this is a component of positive inflation and will help some companies trim fat off very lean bones. This sets up opportunity for re-valuing some mis-priced securities and as such is welcome news and will viewed with highly optimistic enthusiasm! To think that $41 billion has any influence on GDP is like counting raindrops on the deck of The Titanic and heading for the lifeboats too early!

These last years Americans have really enjoyed life much above their actual incomes. That was thanks to morons like Far Eastern citizens that saved their hard earned pennies to buy dollars. And their Central Banks that bought American debt that no one intended to pay back. Now, they are thinking that they'd better enjoy life themselves rather than paying for someones else's party. So now its time to end the party and go back to hard work, hard saving, hard no buying anything that you strictly need...

From Mish: Calculated Risk discussed the discrepency between Case-Shiller and the OFHEO (Office of Federal Housing Enterprise Oversight) in House Prices: Comparing OFHEO vs. Case-Shiller and House Price Indices.
I thought it was the bloggers who were spreading all the bad news that wasn't true. Ministry of truth V.S. the bloggers. Maybe this someday this will be made into a blogumentary. Cheers

So what percentage of the economy is left unscathed?

Military spending!, read somewhere without it GDP would be -2% instead of +.5%. Sorry can't find the article.

So these RMBSs are now rated what, AAA- perhaps? Does the Fed own any of these, or just the CDOs?

Rob Dawg writes:
Drip, drip, drip is not supposed to be measured in multiple billions.

What pisses me off is that being the smartest person in the room is now the sucker bet.

Rob, the economy and the stock market do not move in tandem nor in a straight line.

Patience with your shorts. Just make sure you can outlast the most irrational investor without causing yourself a catastrophic loss.

Wonder how the FED taking MBS/ABS collateral is affecting the "work out"/foreclosure process on the underlying loans/tranches that go bad in the now "extra" collateralized pools? If at all?

C has 5.2 billion shares out, and 1.28 dividend. (bloomberg Src)

so they decide to issue equity to pay the common divvy?

Citi needs more money. April 29 (Bloomberg) -- Citigroup Inc., the U.S. bank hit with writedowns on subprime mortgages and bonds, is selling $3 billion of stock two weeks after reporting its second straight quarterly loss.

The shares are being sold in a public offering, New York- based Citigroup said today in a statement. Citigroup already has raised more than $30 billion of capital since December. A weakening U.S. economy and rising consumer delinquencies forced Chief Executive Officer Vikram Pandit to rescind assurances earlier this year that the bank didn't need to raise more funds.

This was extremely disappointing,'' William Fitzpatrick, an equity analyst at Optique Capital Management in Racine, Wisconsin, said in a Bloomberg Television interview.We were hoping they wouldn't have to go the equity markets like this.''

Can I ask just one stupid question: What part of "Public offering" am I not understanding. Who in their right mind is buying this stuff. Who is buying the hybrid bonds from banks that are likely insolvent. Who is investing in Amback and other monolines that are going monolithic. Can anyone out there with a brain enlighten me.

"You think it will fly Orville" I use that one a lot.
calpers, tiia-cref, a lotta other public funds, you know, suckers. If that is the case- the game is rigged and were all screwed. If this is in fact a giant ponzi scheme then we are all more than screwed.
Well, I bought an equal number of Calls and Puts on ABK, sold the Puts when it dropped, which gave me about a 30% gain over the cost of both.
Now I am one of the holders of ABK June 7.5 Calls that are sorta worthless, but who cares.

What can I say.

The 13T US GDP has been built on inflated assets and debts. For the last 7 yrs, without the tax cuts, the deficit-financed spending for war, the huge housing bubble where would our economy be, the willingness of foreign CB's to hoard US dollars and bonds? Now, the stimuli are waning, the dollars are falling, the risk-averse behavior are back in vogue, new technologies are still in the lab,etc, in this environment even with rising exports, it will be tough to sustain the artificial GDP growth of recent past. So the billions here billions there are more and more valuable, relatively speaking in this economic malaise.