PAY BACK TIME : SEC May Recommend Legal Action Against S&P
The staff of the Securities and Exchange Commission is considering recommending civil legal action against the Standard & Poor's debt ratings agency over its rating of a 2007 collateralized debt offering
Collateralized debt obligations , also known as CDOs, are securities tied to multiple underlying mortgage loans. The CDO generally gains value if borrowers repay. But if borrowers default, CDO investors lose money. Soured CDOs have been blamed for making the 2008 financial crisis worse. Ratings agencies have been accused of being lax in rating CDOs.
The SEC staff said it may recommend that the commission seek civil money penalties, disgorgement of fees or other actions.
http://www.cnbc.com/id/44668294
Showing posts with label Credit Crisis. Show all posts
Showing posts with label Credit Crisis. Show all posts
Tuesday, September 27, 2011
Thursday, September 22, 2011
Moody's downgrades big banks on changed policy
Moody's downgrades big banks on changed policy
By Joe Rauch and David Henry
Wed Sep 21, 2011 6:05pm EDT
(Reuters) - Moody's Investors Service lowered debt ratings for Bank of America Corp, Citigroup Inc and Wells Fargo & Co on Wednesday, saying the U.S. government is getting less comfortable with bailing out large troubled lenders.
The government is "more likely now than during the financial crisis to allow a large bank to fail should it become financially troubled," said the rating agency, a unit of Moody's Corp.
"This is crystallizing the fact we're in a new political reality," said Jason Ware, equity analyst with Salt Lake City-based Albion Financial Group.
Moody's decision hit Bank of America hardest, as it downgraded the long- and short-term debt of the holding company and long-term deposits at its main banking unit.
http://www.reuters.com/article/2011/09/21/us-bankofamerica-downgrade-idUSTRE78K4P020110921
By Joe Rauch and David Henry
Wed Sep 21, 2011 6:05pm EDT
(Reuters) - Moody's Investors Service lowered debt ratings for Bank of America Corp, Citigroup Inc and Wells Fargo & Co on Wednesday, saying the U.S. government is getting less comfortable with bailing out large troubled lenders.
The government is "more likely now than during the financial crisis to allow a large bank to fail should it become financially troubled," said the rating agency, a unit of Moody's Corp.
"This is crystallizing the fact we're in a new political reality," said Jason Ware, equity analyst with Salt Lake City-based Albion Financial Group.
Moody's decision hit Bank of America hardest, as it downgraded the long- and short-term debt of the holding company and long-term deposits at its main banking unit.
http://www.reuters.com/article/2011/09/21/us-bankofamerica-downgrade-idUSTRE78K4P020110921
Thursday, August 18, 2011
US Inquiry Eyes S&P Ratings of Mortgages
US Inquiry Eyes S&P Ratings of Mortgages
The Justice Department is investigating whether the nation’s largest credit ratings agency, Standard & Poor’s, improperly rated dozens of mortgage securities in the years leading up to the financial crisis, according to two people interviewed by the government and another briefed on such interviews.
The investigation began before Standard & Poor’s cut the United States’ AAA credit rating this month, but it is likely to add fuel to the political firestorm that has surrounded that action. Lawmakers and some administration officials have since questioned the agency’s secretive process, its credibility and the competence of its analysts, claiming to have found an error in its debt calculations.
http://www.cnbc.com/id/44184348
The Justice Department is investigating whether the nation’s largest credit ratings agency, Standard & Poor’s, improperly rated dozens of mortgage securities in the years leading up to the financial crisis, according to two people interviewed by the government and another briefed on such interviews.
The investigation began before Standard & Poor’s cut the United States’ AAA credit rating this month, but it is likely to add fuel to the political firestorm that has surrounded that action. Lawmakers and some administration officials have since questioned the agency’s secretive process, its credibility and the competence of its analysts, claiming to have found an error in its debt calculations.
http://www.cnbc.com/id/44184348
Friday, August 05, 2011
Dow average plunges 513, worst drop since 2008
Dow average plunges 513, worst drop since 2008
NEW YORK -- The stock market is finishing its worst day since the financial crisis.
The Dow Jones industrial average plunged more than 500 points Thursday. Investors are concerned that the U.S. economy will enter another recession and that Europe's debt problems are not closed to being solved.
Major stock indexes fell more than 4 percent.
Thursday, February 25, 2010
New home sales drop 11 percent in January, new low
WASHINGTON (AP) -- Sales of new homes plunged to a record low in January, underscoring the formidable challenges facing the housing industry as it tries to recover from the worst slump in decades.
The Commerce Department reported Wednesday that new home sales dropped 11.2 percent last month to a seasonally adjusted annual sales pace of 309,000 units, the lowest level on records going back nearly a half century. The big drop was a surprise to economists who were expecting a 5 percent increase over December's pace.
http://finance.yahoo.com/news/New-home-sales-drop-11-apf-2245141272.html?x=0
The Commerce Department reported Wednesday that new home sales dropped 11.2 percent last month to a seasonally adjusted annual sales pace of 309,000 units, the lowest level on records going back nearly a half century. The big drop was a surprise to economists who were expecting a 5 percent increase over December's pace.
http://finance.yahoo.com/news/New-home-sales-drop-11-apf-2245141272.html?x=0
Tuesday, June 23, 2009
Quote of the Day .................
in the case of Goldman Sacks
"cleaning up the mess is better than making it in the first place"
"cleaning up the mess is better than making it in the first place"
Wednesday, December 26, 2007
Tax Free Bonds : Crisis Brewing ?
I have three issues with tax free Muni bonds at this juncture
1) Many of the Insurers also have insured Mortgage backed securities; the decline of issues may force a lowering of credit rating for the Muni insures and there for negatively impact the Muni Bonds they have insured.
2) Many Hedge funds buy Munis to barrow against, a decline in the credit quality may lead to a decline in collateral and there some hedge funds to sell other equities.
3) On and un related note several state including New Jersey and California are facing some major fiscal issues which could further pressure Muni prices .
I don’t want to come off as an alarmist its not my style but in general Muni investors are the most risk adverse investors and we have already had significant price erosion in many bonds.
So I am suggest for some customers to look at the old stand buy Utilities for income.
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