Rating – Page 7 – Infinite Unknown

Wall Street’s Next Big Problem

September 16, 2008 by Infinite

WHEN I drove to the Beverly Hills offices of Drexel Burnham Lambert on Feb. 13, 1990, the last thing I expected to hear was that the investment bank where I worked was going under. Yet early that morning, we were told that the company was filing for bankruptcy. I was, to put it mildly, blown away. At the time, Drexel had $3.5 billion in assets and was the biggest underwriter of junk bonds.

It all seemed like a very big deal at the time. But what’s happening this week makes me pine for the good old days.

Read moreWall Street’s Next Big Problem

AIG falls 42% in cash scramble

September 16, 2008 by Infinite

Nation’s largest insurer races to raise capital after being hit by credit raters.

NEW YORK (CNNMoney.com) — Shares of American International Group tumbled Tuesday as the company scrambled to raise as much as $75 billion to keep itself afloat.

The pressure on the nation’s largest insurer reached fevered pitch on Monday night as the troubled insurer was hit by a series of credit rating downgrades.

The cuts could prove deadly to AIG (AIG, Fortune 500), forcing it to post more than $13 billion in additional collateral.Shares were down 42% in early morning trading, after falling more than 70% in early morning trading and losing 61% of their value the day before.

AIG shares fall 52 percent

September 15, 2008 by Infinite

NEW YORK (Reuters) – Shares of American International Group fell more than 50 percent in early trading on reports that the insurer had turned to the Federal Reserve for $40 billion in bridge financing to ward off a liquidity crisis and ratings downgrades.

AIG shares dropped 52 percent to $5.82 on the New York Stock Exchange before recouping a bit to $7.41. The shares have fallen 80 percent this year and closed Friday at $12.14.

Bank of America Said to Reach $44 Billion Deal to Buy Merrill

September 14, 2008 by Infinite

Sept. 14 (Bloomberg) — Bank of America Corp. reached a deal to acquire Merrill Lynch & Co. for about $44 billion, the Wall Street Journal reported, after shares of the third-biggest U.S. securities firm fell by more than 35 percent last week and smaller rival Lehman Brothers Holdings Inc. neared bankruptcy.

GM, Crysler and Ford: S&P cuts ratings lower into junk

August 1, 2008August 1, 2008 by Infinite

NEW YORK (Reuters) – Standard & Poor’s on Thursday cut ratings on all three major U.S. automakers deeper into junk status, citing expected losses due to higher gas prices and a weakening U.S. economy.

S&P cut its ratings for General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz), Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) and Chrysler Automotive LLC to “B-minus,” or six levels below investment grade, from “B.” It also cut to “B-minus” from “B” the finance arms of Ford, Chrysler and GMAC, which is 49 percent owned by GM.

Amber light flashing on U.S. dollar intervention

July 17, 2008July 17, 2008 by Infinite

So Inflation is really the greatest export of the US.
_____________________________________________________________________________________

LONDON (Reuters) – Three days before the last bout of coordinated central bank intervention to calm world currency markets, the International Monetary Fund’s top economist opined: “If not now, when?” Many experts are now asking the same.

Run on banks spells big trouble for US Treasury

July 13, 2008 by Infinite

IN A modern financial system nothing is more frightening than a run on the bank. The US has now suffered a series of them, and they are escalating in size and scope, posing a serious threat to an already reeling economy.

Rumours swamped financial markets on Friday that the US Government would be forced to step in to aid the mortgage finance giants Fannie Mae and Freddie Mac, which together own or guarantee $US5 trillion ($5.16 trillion) in US home loans.

In Wall Street’s version of a run on the bank, investors drove Fannie Mae and Freddie Mac shares to 17-year lows, signalling a gnawing lack of faith in the companies’ ability to survive rising mortgage defaults without the Government’s help.

Later on Friday regulators took over IndyMac Bank of Pasadena, saying the $US32 billion lender had collapsed under the weight of bad home loans and withdrawals by spooked depositors. It was the second-largest bank to fail in US history.

Friday’s events were felt around the world, knocking the battered US dollar lower and driving up interest rates.

“This is a flare-up in the financial forest fire that is far beyond anything we’ve seen before,” said Christopher Low, chief economist at the investment firm FTN Financial in New York.

It is triggering worries that would have been unthinkable even a year ago, including that the US Treasury’s debt might lose its AAA credit grade because of heavy blows to the nation’s fiscal health from the housing mess.

Four months ago many on Wall Street believed they had seen the worst of the credit crisis rooted in the housing market’s woes. The collapse in March of the brokerage Bear Stearns, a central player in the business of packaging dicey mortgages for sale to investors, was the kind of prominent calamity that has historically marked the end of financial crises.

Fed takes boldest action since the Depression to rescue US mortgage industry

June 25, 2008March 14, 2008 by Infinite

The US Federal Reserve has taken the boldest action since the 1930s, accepting $200bn of housing debt as collateral to prevent an implosion of the mortgage finance industry and head off a full-blown economic crisis.

Emergency action was co-ordinated by Ben Bernanke [right], Donald Kohn [top], and Mark Carney after problems emerged

Fed Prints Another $200 Billion Out Of Thin Air

March 17, 2008March 14, 2008 by Infinite

World central banks unite to ease credit strain

WASHINGTON (Reuters) – The U.S. Federal Reserve and four other central banks on Tuesday teamed up to get hundreds of billions of dollars in fresh funds to cash-starved credit markets, allowing financial firms to use securities backed by home mortgages as collateral for central bank loans.

Stocks surged, bonds fell and the long-suffering U.S. dollar soared in reaction to the moves, a sign financial markets saw the plan as a step in the right direction to ease a crisis that has threatened world economic growth. The Dow Jones industrials closed nearly 3.6 percent higher.

In the latest effort to ease a credit contraction that has disrupted global finance, the Fed, Bank of Canada, Bank of England, European Central Bank and Swiss National Bank announced a series of aggressive measures to boost liquidity. It was the second time in three months that central banks from around the globe had launched coordinated efforts.

Wall Street economists were quick to call the new lending facility a step in the right direction, but what’s most needed is time for the de-leveraging of billions of dollars in loans globally.