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
how bad is this
Started by
relax
, Jul 10 2007 03:42 PM
4 replies to this topic
#1
Posted 10 July 2007 - 03:42 PM
#2
Posted 10 July 2007 - 04:08 PM
financials should take a hit...again.
This story is a long way from being over IMHO.
OTIS.
#3
Posted 10 July 2007 - 04:32 PM
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
“be right and sit tight”
#4
Posted 10 July 2007 - 04:34 PM
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.
#5
Posted 10 July 2007 - 05:55 PM
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.