4 replies to this topic

[relax]

just came in from marketwatch Moody's may downgrade 32 more residential MBS Moody's downgrades 399 residential MBS Higher delinquency rates drove downgrades, Moody's says RMBS backed by fixed-rate, ARM first-lien loans: Moody's RMBS backed mainly by subprime home loans: Moody's

[nimblebear]

financials should take a hit...again. This story is a long way from being over IMHO.

[rkd80]

what do these numbers mean exactly/

just came in from marketwatch


Moody's may downgrade 32 more residential MBS


Moody's downgrades 399 residential MBS


Higher delinquency rates drove downgrades, Moody's says

RMBS backed by fixed-rate, ARM first-lien loans: Moody's
RMBS backed mainly by subprime home loans: Moody's

[selecto]

I expect the lawyers will be all over Moody's. Looks like the market thinks so too. It will be interesting to know how they were able to opine on the credit worthiness of no-info loans.

[ogm]

It means bad news for those who were buying that paper ( asset managers, insurance companies, pension funds, hedge funds....), since it will be now marked down in price on their books. There is really no market for it at this point, and its hard to get rid of at any reasonable price anyway. It also means bad news for those who were making a lot of money selling that paper .. ie Brokers. Their business will be hurt big time. LEH, BSC, etc. Don't pay attention to their low P/Es. The stocks will be lower and P/E's much higher. Their business is hurting with the developing credit crunch. It also means bad news for housing. Since if the demand for the low grade paper is falling, it cuts off more and more buyers with questionable credit. ( Less buyers = more imbalance in supply and demand = pressure on housing prices) Bad news all around, basically. More of that to come.