Category: Articles

As if the ratings agencies did not need any more bad press. This action could not have been more ill-timed…

The day after 60 minutes aired this piece of the coming Alt-A disaster,

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Ficth took the following action:
From Housing Wire

Citing “a rapid deterioration of U.S. Alt-A RMBS performance,” Fitch Ratings again took the hatchet to its previous assumptions for Alt-A mortgages on Monday morning, revising its surveillance methodology and updating loss projections for all U.S. Alt-A RMBS.

Fitch said it now expects losses on all Alt-A collateral to far exceed the estimates of its ‘moderate stress’ scenario in its late ratings update earlier this year. “Market developments, ongoing home-price declines and loan performance trends in the Alt-A sector over the prior six months have effectively eliminated the possibility of this stress scenario,” said Fitch in a statement.

The rating agency said it now expects average cumulative losses om 2005, 2006 and 2007 vintage Alt-A transactions to hit 2.72, 6.78 and 9.58 percent, respectively, up dramatically from expectations at the agency earlier this year.

Fitch cited a “rapid increase in 60+ day delinquencies experienced over the past six months,” despite servicers’ collective efforts to hold off on actual foreclosure sales — likely implying that a halt to foreclosures is having little effect in resolving borrower delinquencies. Between May and October 2008, Fitch said that 60+ day delinquencies for the 2007 vintage increased from 8.80 percent to 14.65 percent; 2006 and 2005 vintages also experienced steep increases rising from 10.30 percent to 14.24 percent and 6.57 percent to 8.79 percent, respectively.

While delinquencies are continuing to pile up, cumulative losses are not — at least, not yet.. “The small increase in cumulative losses relative to the rising level of 60+ day delinquencies reflects, in part, the lengthening foreclosure/liquidation timeline being experienced throughout all vintages,” analysts at the agency wrote.

All of which means that it’s time to get ready for a whole new slew of downgrades to Alt-A in the coming few weeks. Fitch warned in its note Monday that it expects that it will downgrade many senior bonds to below investment grade — just in time for fourth quarter earnings.

Now here is the really sad part, in October I reported the same information from Tilson from the Value Investing Congress. This information was first presented by Tilson in the spring of 2008 (I believe, it may have been earlier).

So, where has Fitch been? Why are they only now taking action on it? Were they hoping and praying for a miracle to avoid more AAA ratings of their’s and their compatriots at S&P and Moody’s (MDO) turning into the garbage most folks know them to be?

It is really sad this stuff is still going on..

Although, if you are looking for that summer home, 2009 and 2010 and i have said here several times will be prime picking for them..happy hunting..

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Given current events, this is………. “ironic”?

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Roubini:

On a side note, it would be easier to date these clips is Roubini would actually wear anything other than a light blue shirt. At least he “86’d” the blue tie that usually goes with it.

Rogers:

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Ok, Tilson has been saying this same thing for a year now. Nice that the MSM has finally caught on.

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Profile, Madoff, Banks. Madoff

– Market Folly has a nice post on three traders

– The list of “victims”

– Bankrupt

– OK

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This Scribd thing is pretty cool. digging for information take a little time but there is some great stuff there.

Lampert K-Mart Bankruptcy

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304 pages of articles on the crisis.

Nightmare on Wall Street

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Whitney really does a great job here explaining the what’s and the why’s as to how we got to where we are today.

Video:

It should be noted here that Tilson’s T2 fund has begun buying as he said “some of the most toxic mortgage assets a out there”. Nothing will help turn things around faster than private money coming into this market. Now if we can just get the gov’t out of the way.

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Berkowitz and Leucadia (LUK) hold almost 45% of the outstanding shares.

-AMERICREDIT CORP. (NYSE:ACF) today announced the appointment of Bruce R. Berkowitz to its board of directors. AmeriCredit’s board now includes ten directors.

Mr. Berkowitz is the President of Fairholme Funds, Inc., and is also a member of its board of directors. He has more than 24 years of investment management experience and is the Managing Member and Chief Investment Officer of Fairholme Capital Management, L.L.C. Mr. Berkowitz also serves as a director and member of the audit committee of TAL International and White Mountains Insurance Group.

“We are pleased to add such a well-respected and experienced professional to our board of directors. I am certain that our company and our shareholders will benefit greatly from his knowledge and insight,” said AmeriCredit’s Chairman Clifton Morris Jr.

Additionally, in consummation of the transaction announced on Nov. 24, 2008, between AmeriCredit and Fairholme Funds, Inc., (FAIRX) AmeriCredit has issued approximately 15.1 million shares of its common stock to Fairholme Funds, Inc., valued at $6.02 per share, in exchange for $108 million of par value of AmeriCredit’s 8.50% Senior Notes due 2015.

FULL RELEASE

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Regular readers know Grant’s wisdom is highly valued here. Therefore this interview is a listen.

Here is a review of his book I did a few months ago

Part 1: “Disastrous inflation is brewing..”

Part 2:

Part 3

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Sorry but if you invest millions or billions and do not ask any questions, oh well…what is the saying? “a fool and his money…..”?

Here is the coverage. do not have too much to say other than what I said in the beginning but readers are emailing about it.

Bloomberg:

Bloomberg:

MSNBC

MSNBC

When smart people (or those alleged to be) show such stunning indifference to their wealth, I just cannot muster up sympathy for them.

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Ok. Here is a great discussion between Peter Schiff, Don Luskin and Robert Froehlich about the auto situation (Steve Forbes in in the second video). Got to be honest….Schiff wins this one hands down..

So, we know what I have said about Mr. Schiff in the past. I still stand by that. But, here and now I think he is the one that makes the most sense. The best quote “we are punishing success and rewarding failure” with the gov’t bailouts.

Here is the video:

In this part Schiff argues the dollar is going to crater, buy gold, avoid financials, and look at hard metals.

Part 2:

Mr. Schiff, I notice you have a new book out, forward me a copy and I’ll give a read and a review.

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