Ratings, Liquidations & The Trifecta
The Few and the Proud...
The number of companies ranked AAA by the biggest credit ratings firms dwindled to three worldwide today as Fitch Ratings stripped Nestle SA of the top grade.
Nestle, the largest global food company was downgraded to AA+ after announcing its largest stock buy back ever.
Only Johnson & Johnson, Toyota Motor and Exxon Mobil hold a complete set of AAA ratings from S&P, Fitch and Moody's.
Remember our Natterings on Margin Requirements...
As of March, Basis Capital Fund Management Ltd. had $1 Billion in assets, last months estimate had the fund losing 50%.
Today, Basis told investors losses at one of its hedge funds may exceed 80%.
Basis Capital's financiers have increased margin requirements, forcing the fund to liquidate its assets.
Take my loans, please... Kohlberg Kravis Roberts & Co., sold $5.1 billion in loans at a net loss of $40 million.
KKR plans to sell their remaining $5.8 billion in residential mortgage-backed securities; KKR Shares dropped 39%.
Hitting a 16 year low... The National Association of Home Builders/Wells Fargo index of builder confidence declined to 22, from 24 in July.
We've speculated on a Trifecta...
"By year's end, the Nattering One would not be surprised to see a trifecta...
At least one major: lender, brokerage house and bank will freeze & seize customer assets, collapse and board up its doors."
Today, Countrywide Financial, the biggest U.S. mortgage lender, downgraded by Merill Lynch from buy to sell on solvency and bankruptcy fears.
Kenneth Bruce, a Merrill analyst: "Effective insolvency would result should creditors force Countrywide to sell assets at depressed prices or investors lose confidence in its ability to raise cash.
Shareholders shouldn't understate the importance of liquidity. If liquidations occur in a weak market, then it is possible for CFC to go bankrupt."
Japan's largest bank Mitsubishi Financial reported unrealized losses of about 5 billion yen ($42.6 million) on sub prime loans.
Mitsubishi UFJ had a balance of 280 billion yen in subprime- backed securities, Net income declined 31%, shares dropped 5.3% to their lowest level in 2 years
Sumitomo Mitsui Financial Group said it recorded "several billion yen" of losses in the last three months...
after selling about 350 billion yen in U.S. mortgage-backed securities. Sumitomo Mitsui had an outstanding balance of 100 billion yen in subprime loans.
Shares fell 5.9%, the largest one day drop in more than three years.
Japan's four biggest banks, have each lost a fifth of their market value in the past month.
The number of companies ranked AAA by the biggest credit ratings firms dwindled to three worldwide today as Fitch Ratings stripped Nestle SA of the top grade.
Nestle, the largest global food company was downgraded to AA+ after announcing its largest stock buy back ever.
Only Johnson & Johnson, Toyota Motor and Exxon Mobil hold a complete set of AAA ratings from S&P, Fitch and Moody's.
Remember our Natterings on Margin Requirements...
As of March, Basis Capital Fund Management Ltd. had $1 Billion in assets, last months estimate had the fund losing 50%.
Today, Basis told investors losses at one of its hedge funds may exceed 80%.
Basis Capital's financiers have increased margin requirements, forcing the fund to liquidate its assets.
Take my loans, please... Kohlberg Kravis Roberts & Co., sold $5.1 billion in loans at a net loss of $40 million.
KKR plans to sell their remaining $5.8 billion in residential mortgage-backed securities; KKR Shares dropped 39%.
Hitting a 16 year low... The National Association of Home Builders/Wells Fargo index of builder confidence declined to 22, from 24 in July.
We've speculated on a Trifecta...
"By year's end, the Nattering One would not be surprised to see a trifecta...
At least one major: lender, brokerage house and bank will freeze & seize customer assets, collapse and board up its doors."
Today, Countrywide Financial, the biggest U.S. mortgage lender, downgraded by Merill Lynch from buy to sell on solvency and bankruptcy fears.
Kenneth Bruce, a Merrill analyst: "Effective insolvency would result should creditors force Countrywide to sell assets at depressed prices or investors lose confidence in its ability to raise cash.
Shareholders shouldn't understate the importance of liquidity. If liquidations occur in a weak market, then it is possible for CFC to go bankrupt."
Japan's largest bank Mitsubishi Financial reported unrealized losses of about 5 billion yen ($42.6 million) on sub prime loans.
Mitsubishi UFJ had a balance of 280 billion yen in subprime- backed securities, Net income declined 31%, shares dropped 5.3% to their lowest level in 2 years
Sumitomo Mitsui Financial Group said it recorded "several billion yen" of losses in the last three months...
after selling about 350 billion yen in U.S. mortgage-backed securities. Sumitomo Mitsui had an outstanding balance of 100 billion yen in subprime loans.
Shares fell 5.9%, the largest one day drop in more than three years.
Japan's four biggest banks, have each lost a fifth of their market value in the past month.
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