“… defaults of a different kind could be the big issue of 2008. If you want to mug up on jargon for the year ahead, then the business of insuring against bond defaults known as credit default swaps, or CDSs,…
Two weeks ago, California Governor Arnold Schwarzenegger said that in January he would declare a “fiscal emergency” in the face of an anticipated $14 billion budget defecit for the 2008-09 fiscal year (July 1, 2008-June 30, 2009)(“Budget Crisis Decree Coming”,…
Before the open this morning, Morgan Stanley (MS) announced fiscal year 4th quarter earnings, which included a $9.4 billion writedown related to mortgage backed securities. This resulted in a loss of $3.6 billion in the quarter or $3.61 a share! …
This weekend, in his “Current Yield” column for Barron’s, Randall Forsyth wrote the best concise explanation I’ve read for what is going on in markets now in an article entitled “Giving Credit Its Due, Finally” (subscription required – e-mail me and…
All you really need to read to understand today’s market crash is an article on the front page of The Wall Street Journal titled: “Banks Delay Sale of Chrysler Debt As Market Stalls” (subscription required). If you really want to…
It seems like the biggest story of the last 4 weeks, the problems at two Bear Stearns hedge funds involved in subprime mortgage backed securities, is coming to an end. In a letter to clients (subscription required) Bear had this…
“The fallout of the subprime meltdown on financial services companies that hold some of the debt creates some risk to earnings. The financials make up over 25% of earnings for the S&P 500, so a series of disappointments in financials…
“We’re talking about massive, massive downgrades here.” – Rod Dubitsky, Asset Backed Real Estate Debt Analyst, Credit Suisse, ranked #2 last year by Insitutional Investor magazine in his category “A lot of these should be downgraded sooner rather than later.” –…
Make no mistake: this week, as last week, is all about the blow up of the two Bear Stearns hedge funds heavily invested in subprime mortgage backed securities. And The Wall Street Journal, as usual, is to be commended for…
“The fear is that this Bear situation is the tip of the iceberg and it could lead to other funds being liquidated.” – Todd Clark (subscription required), Director of Stock Trading, Nollenberger Capital Partners “There’s fear of further liquidations.” – Jeffrey…