Chicanery & Downgrades
Less Production, More Supply...
Chevron #2 US oil company, Q3 earnings fell more than 25%, missing analyst estimates on sharply lower profits from gasoline production.
The company's U.S. refineries processed 168,000 fewer barrels of oil per day than last year, while worldwide production dropped about 4% to 2.6 million barrels a day.
Chevron CEO Dave O'Reilly: the company had difficulty recovering its higher fuel costs because the U.S. market was well supplied with gasoline.
3 Card Monty Debt Swaps...
Merrill Lynch engaged in deals with some hedge funds that may have been designed to postpone disclosure of losses on bonds and derivatives backed by subprime mortgages.
The deals involved guarantees by Merrill to buy back debt it sold to those hedge funds.
Those 3 Little Words... WSJ citing people close to the matter: The SEC is examining how the brokerage valued mortgage securities and how it disclosed those investments.
If there are much higher CDO writedowns, Merrill may have additional credit rating downgrades.
Pots call Kettles Black... Deutsche Bank downgraded Merill from Buy to Hold, and dropped its target to $65 from $80.
Deutsche analysts: The downgrade was due to concerns that new CDO write downs could approach $10 billion given a worse CDO market.
Q4 earnings at U.S. banks and brokerages may decline by 20% due to charges linked to credit market losses. Reserves for loans are the lowest since 1983.
We've Nattered before... what happens when further defaults & downgrades force reserve requirements to rise exponentially?
Chevron #2 US oil company, Q3 earnings fell more than 25%, missing analyst estimates on sharply lower profits from gasoline production.
The company's U.S. refineries processed 168,000 fewer barrels of oil per day than last year, while worldwide production dropped about 4% to 2.6 million barrels a day.
Chevron CEO Dave O'Reilly: the company had difficulty recovering its higher fuel costs because the U.S. market was well supplied with gasoline.
3 Card Monty Debt Swaps...
Merrill Lynch engaged in deals with some hedge funds that may have been designed to postpone disclosure of losses on bonds and derivatives backed by subprime mortgages.
The deals involved guarantees by Merrill to buy back debt it sold to those hedge funds.
Those 3 Little Words... WSJ citing people close to the matter: The SEC is examining how the brokerage valued mortgage securities and how it disclosed those investments.
If there are much higher CDO writedowns, Merrill may have additional credit rating downgrades.
Pots call Kettles Black... Deutsche Bank downgraded Merill from Buy to Hold, and dropped its target to $65 from $80.
Deutsche analysts: The downgrade was due to concerns that new CDO write downs could approach $10 billion given a worse CDO market.
Q4 earnings at U.S. banks and brokerages may decline by 20% due to charges linked to credit market losses. Reserves for loans are the lowest since 1983.
We've Nattered before... what happens when further defaults & downgrades force reserve requirements to rise exponentially?
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