CBam, I guess that would lead to too many downgrades ... seriously, I expect they will apply the new methods to prime jumbos too.
Elvis, it's amazing. 90% of Alt-A bonds are AAA - and an avalanche of downgrades are about to hit. Anyone who owns that RMBS might want to think about selling now!
Did that ominous rumbling sound just get a little louder? Anyone else hear that? What the heck is that, anyway?
Probably nothing. Never mind. How 'bout them [insert team here]?
AAA ratings on any RMBS securities are already meaningless anyway. What difference does this make? The rating agencies lost their credibility a long time ago. The bad alt-A news has been making headlines for months, hope you sold then.
May 30 (Bloomberg) -- Moody's Investors Service has created a new unit that surprises even its own director.
The team from Moody's Analytics, which operates separately from Moody's ratings division, uses credit-default swap prices as an alternative system of grading debt. These so-called implied ratings often differ significantly from Moody's official grades.
Seems to me that CDS-based "ratings" are more accurate than the rating agencies' official ratings in the same way that the actual market price of a stock is more accurate than the "target" price or "fair value" spouted by a stock analyst. One represents the weighted opinions of hundreds of people investing their capital, the other is an estimate by a few folks with other agendas and little to lose if they are wrong.
ABK and MBI sure look like candidates for collapse (with the requisite forced buyout, nationalization, etc) based on their recent stock action.
Patrick,
I don't think this is what you're looking for but here is a link to some charts the Fed had on geographic concentrations. It might help you get to what you're looking for-http://blog.metro-real-estate.com/?p=360.
As far as Alt-A goes it may be the gorilla in the room. The Alt-A and Option Arm overhang is still looming over the market and has yet to be dealt with. Here is a link to that issue with graphs-http://blog.metro-real-estate.com/?p=304
"gn writes:
Seems to me that CDS-based "ratings" are more accurate than the rating agencies' official ratings in the same way that the actual market price of a stock is more accurate than the "target" price or "fair value" spouted by a stock analyst."
Exactly. Moody's is just doing now what credit analysts have been doing for years. You calibrate market spreads to an implied rating, and then you can trade the bond versus where you think the rating should be. The actual rating from the Agencies is just a point of trivia.
It is kind of funny that they are publishing it themselves. It seems a bit silly for them to publicise that the market-based ratings work better.
Tsrif.
Would there be any reason not to apply the new surveillance approach to prime-jumbo securities?
Wow. Adding new information as it becomes available in order to update the rating? Imagine that.
I'm going OT with this one but I wanted to ask if anybody had saved some data that I would like to get my hands on.
The NY Fed posted charts about subprime mortgage conditions in the US. The link below shows the data I am talking about:
http://www.newyorkfed.org/regional/subprime.html
They originally published the data for this report at the state level, MSA level, and County Level. Now they are only providing the state level data.
I would like to get a hold of that MSA and County level data if anybody saved it to their computer. Please let me know.
Also, sorry to hijack the comments like this, but it seemed like one of the best places to go for a request of this nature.
My email is: pbrennan@seedco.org if you can pass the links along to me I would be greatly appreciative.
I propose alt-A as a new slang word for somebody who appears reliable and respectable, but really isn't. "He's alt-a, dude, don't trust what he says."
"``I don't know if it's going to be a majority or not but I think a large number of the senior classes are facing downgrade pressure,'' he said."
Later Barberio also said that, "I'm not sure whether the number of newborn babies born is a majority of babies born or not..."
CBam, I guess that would lead to too many downgrades ... seriously, I expect they will apply the new methods to prime jumbos too.
Elvis, it's amazing. 90% of Alt-A bonds are AAA - and an avalanche of downgrades are about to hit. Anyone who owns that RMBS might want to think about selling now!
Best to all.
Did that ominous rumbling sound just get a little louder? Anyone else hear that? What the heck is that, anyway?
Probably nothing. Never mind. How 'bout them [insert team here]?
TIMBERRRRRRRRR!
The chart on this one, when it is finally all said and done, will be the epitome of cliff-diving. Where are my rolaids?
Damn somebody finally woke up over there.
Guess Bernacke better make a little more room over at the FED
AAA ratings on any RMBS securities are already meaningless anyway. What difference does this make? The rating agencies lost their credibility a long time ago. The bad alt-A news has been making headlines for months, hope you sold then.
Moody's Implied Ratings Show MBIA, Ambac Turn to Junk (Update2)
By David Evans
May 30 (Bloomberg) -- Moody's Investors Service has created a new unit that surprises even its own director.
The team from Moody's Analytics, which operates separately from Moody's ratings division, uses credit-default swap prices as an alternative system of grading debt. These so-called implied ratings often differ significantly from Moody's official grades.
No one in bubble world cares about fitch. They don't play the right tunes in the right key.
I swear....I am really going to downgrade those securities!
I really really really really...mean it this time!
Seems to me that CDS-based "ratings" are more accurate than the rating agencies' official ratings in the same way that the actual market price of a stock is more accurate than the "target" price or "fair value" spouted by a stock analyst. One represents the weighted opinions of hundreds of people investing their capital, the other is an estimate by a few folks with other agendas and little to lose if they are wrong.
ABK and MBI sure look like candidates for collapse (with the requisite forced buyout, nationalization, etc) based on their recent stock action.
I hate to be a whiner, but unless Moody's or S&P does the downgrading, it seems really not to count.
Good work, Fitch; about time!
Doesn't the Fed have some of these securities right now?
4th bank goes down today...
6:19First Integrity Bank NA in Staples, MN fails, fourth in 2008
financial firms are clear now through the 2nd quarter reporting period (in re to downgrades for the alt-a's)
re-rating now means another 3 months breather to try and find ways to make the numbers work better for those with lots of alt-a loans
so, even if there's a mini (or more) crash relatively soon, there'll be another accounting, in re to the alt-a's, in the fall
if you like the hurricane analogies, these, to me, seem like the feeder bands leading to the eye wall now
if not, still scary to me
Patrick,
I don't think this is what you're looking for but here is a link to some charts the Fed had on geographic concentrations. It might help you get to what you're looking for-http://blog.metro-real-estate.com/?p=360.
As far as Alt-A goes it may be the gorilla in the room. The Alt-A and Option Arm overhang is still looming over the market and has yet to be dealt with. Here is a link to that issue with graphs-http://blog.metro-real-estate.com/?p=304
"gn writes:
Seems to me that CDS-based "ratings" are more accurate than the rating agencies' official ratings in the same way that the actual market price of a stock is more accurate than the "target" price or "fair value" spouted by a stock analyst."
Exactly. Moody's is just doing now what credit analysts have been doing for years. You calibrate market spreads to an implied rating, and then you can trade the bond versus where you think the rating should be. The actual rating from the Agencies is just a point of trivia.
It is kind of funny that they are publishing it themselves. It seems a bit silly for them to publicise that the market-based ratings work better.