Global Economic Collapse

    Potential CDO downgrades climb to $1.4 bln - Fitch


    NEW YORK, July 23 (Reuters) - Fitch Ratings on Monday said it may lower ratings on 26 parts of 12 collateralized debt obligations (CDOs) due to eroding quality of subprime mortgage bonds held in the securities.


    The potential cuts affect $603 million in debt, bringing the total for subprime-related CDOs on watch for downgrade to about $1.4 billion, Fitch said in a statement.


    Investors have been expecting downgrades on CDOs will follow cuts to the underlying mortgage bonds that have been mounting at a rapid pace this month. Mortgage bonds were increasingly favored for yield in CDOs until last year as the slumping U.S. housing market revealed unsound underwriting practices and excessive credit.


    CDOs are created by taking portions of debt securities and packaging them into new bonds that are split into several classes by degree of risk.


    Two CDO classes placed on watch for downgrade -- Northlake CDO I, Ltd.'s class II notes and Pacific Coast CDO, Ltd.'s class A notes -- are rated "A" and "AA," respectively. The rest are lower-investment grade bonds rated "BBB" and below.


    © Reuters 2007. All Rights Reserved.

    Is America becoming a global credit risk?


    Goldman Sachs guru warns of war-debt failure. Is America becoming a global credit risk? How to get back on track?


    Subprimes downgraded. Will Moody's downgrade America's debt next? Actually, that's already happening; our credit rating is collapsing with the dollar.


    Foreign banks are dumping dollar reserves, while we gorge on cheap toys and bad pet food. Actually, our biggest "terrorist" threat is internal: Distorted values are downgrading our nation's "creditworthiness." We're like out-of-control kids with stolen credit cards, spending our future with no plans to repay.


    http://www.marketwatch.com/new…%2DA53F%2DE67A522A775A%7D

    Eigenzitat vom 5.7. 2007:


    Zitat

    Original von auratico
    Die italienische Bank Italease muss ihre Kunden mit 610 Millionen € aus einer Nachschusspflicht bei Derivatgeschäften herauskaufen, indem sie die Zinsrisiken aufkauft - sonst würde wohl die Bank selbst hopps gehen.
    Interessant, dass die Verluste bei diesen völlig unregulierten Vehikeln sich keinesfalls linear entwickeln, sondern blitzschnell, unberechenbar und exponentiell. Das heisst nichts anderes, als dass bei der Konstruktion dieser "Produkte" genau dies nicht gelungen ist, wozu sie eigentlich gut sein sollten, nämlich das Risiko grossflächig zu verteilen.


    auratico


    Und nun, nur 3 Wochen später, ist die Bank Itallease tatsächlich dabei, hopps zu gehen und muss von der italienischen Zentralbank "aufgefangen" werden. Keine Rede mehr davon, dass sie selbst dazu in der Lage wäre, einer Nachschusspflicht nachzukommen.
    Es ist schon erstaunlich, in welchem Tempo sich die faulen Derivate auf ihren wahren Wert zurückschrauben:


    Italy set to bail out bank after huge derivatives losses


    By Ambrose Evans-Pritchard


    Last Updated: 12:40am BST 25/07/2007


    Will the bubble burst?


    Board members of the Italian bank Italease were in emergency session last night amid reports that the central bank may step in following huge losses on the derivatives markets.


    Italease shares fell 10.5pc on the Milan bourse after the financial daily Il Sole reported that the Bank of Italy intended to install its own interim management after conducting a review of Italease's disastrous bets on leveraged credit futures. The company, which was worth €2bn (£1.34bn) in April, has since lost three-quarters of its value.


    advertisementThe bank has sent out margin calls to 2,200 clients in an attempt to claw back €610m paid to counterparties to stave off disaster after losses suddenly began to spiral out of control.


    http://www.telegraph.co.uk/mon…2007/07/25/cnitaly125.xml



    grüsse


    auratico

    Kalifornien verzeichnet traumhafte Wachstumsraten... :D


    [URL=http://www.latimes.com/business/la-me-housing25jul25,0,331109.story]Foreclosures soar in California[/URL]


    LOS ANGELES — A sagging real estate market and tighter lending standards are exacting a growing toll on Californians, forcing them from their homes in record numbers, figures released Tuesday show.


    Foreclosures soared to 17,408 for the three months ended June 30, an increase of 799 percent from the same period last year. The current rate handily exceeds the previous foreclosure peak set in 1996, when the state was in the final throes of six-year slump.


    Gruss

    Es ist noch kein Verschwörungstheoretiker vom Himmel gefallen.
    - Altes Sprichwort, neu übersetzt

    Defaults on Some `Alt A' Loans Surpass Subprime Ones (Update1)


    By Jody Shenn


    July 24 (Bloomberg) -- Defaults on some so-called Alt A mortgages packaged into bonds last year are now outpacing those from subprime loans, according to Citigroup Inc.


    The three-month constant default rate for 2006 Alt A hybrid adjustable-rate mortgages is 2.3 percent, compared with 2.2 percent for subprime ARMs, New York-based Citigroup analysts led by Rahul Parulekar wrote in a July 20 report. The figures represent the percentage of balances in a mortgage-bond pool expected to default in the next year based on 90-day trends.


    The speed at which Alt A hybrid ARMs are being paid off due to home sales or refinancing has also fallen to about the same level as for subprime ARMs, which typically prepay more slowly, the analysts said. Slower prepayments can make the same rates of defaults more damaging by leaving more of the initial balances outstanding to eat into bond-investor protections.


    The combination of challenges mean 2006 bonds backed by Alt A mortgages, a credit grade above subprime loans, may need ``lower loss severities to still come out with lower cumulative losses than subprimes,'' the Citigroup analysts wrote.


    More than $800 billion of subprime mortgage bonds and $700 billion of Alt A bonds are outstanding, with ARM bonds totaling more than $600 billion and $450 billion, respectively, according to a March report by Zurich-based Credit Suisse Group.


    Size of Losses


    Severities represent the size of losses incurred after borrowers stop making payments. The losses can include the difference between what a seized home is sold for and the loan amount if a homeowner can't sell or catch up on payments; legal and other foreclosure and sales costs; and reimbursement of advances made for a time in which a borrower isn't paying.


    The Citigroup analysts are working on a report related to default severities, Parulekar said yesterday.


    The three-month constant default rates were measured with loans in 2006 bonds at an average age of 16 months. The level for the Alt A ARMs was at a record for that point in time. Late payments of at least 60 days, foreclosures and already seized property among all Alt A mortgages in securities issued in 2006 are now at 4 percent, according to data compiled by Bloomberg.


    Alt A mortgages, short for Alternative A, are loans that fall just short of the typical underwriting standards of Fannie Mae and Freddie Mac, the two largest mortgage companies. They're usually granted to borrowers with good credit records who seek atypical underwriting or loans, such as reduced proof of their pay, lending on an investment property or so-called option ARMs.


    Such flexibilities are given on prime loans if borrowers have enough offsetting positive attributes, like cash for large down payments. Subprime mortgages are given to borrowers with poor or limited credit records or high debt burdens.


    Ratings Cuts, Warnings


    Moody's Investors Service last week said it may downgrade $316 million of Alt A securities created last year, joining Standard & Poor's in saying it is considering downgrading such bonds. Ratings cuts and warnings by the New York-based services have so far affected more 2006 subprime securities.


    Average default rates obscure that ``within things called Alt A, we see a very wide spectrum of credit quality,'' said Andrew Davidson, the head of New York-based Andrew Davidson & Co. Inc., which sells consulting service and risk analytics for mortgage and asset-backed bonds.


    Defining Alt A


    ``That's the problem with Alt A: It's a name that doesn't really have a meaning,'' said Davidson. ``The top end of Alt A is certainly under stress but may not face serious problems.''


    The Citigroup analysts used Alt A ARMs with five years of fixed rates for their study. They didn't include so-called option ARMs, a type of loan with minimum payments that produce growing debt in $200 billion of Alt A bonds. Citigroup was the ninth largest underwriter of non-guaranteed mortgage securities in the first half, according to newsletter Inside MBS & ABS.


    About 83 percent of balances of the 2006 Alt A ARMs were outstanding by the time the loans reached an average age of 12 months, the report said, compared with 76 percent for loans made in 2003. For 2006 subprime loans, 84 percent of balances remained outstanding, compared with 81 percent for 2003 loans.


    The previous worst ``vintage'' for non-prime mortgage bonds was 2000, which has produced 4.5 percent loan losses so far for subprime bonds and 0.5 percent in Alt A, Citigroup said.


    In a typical Alt A ARM transaction this year, buyers of BBB bonds were protected against losses of 3 percent by having lower-rated or unrated bonds hurt first, according to a June report by Bear Stearns Cos. In a subprime deal, the level was 7 percent. At the AAA level, some Alt A bonds were protected against 10 percent losses, versus 25 percent for subprime.


    Between June 1 and July 17, typical yield premiums over benchmarks on BBB rated Alt A bonds widened by 125 basis points to 475 basis points, while spreads for BBB subprime bonds rose 200 basis points to 450 basis points, according to Citigroup.


    http://www.bloomberg.com/apps/…SvfvHw3cQ&refer=bondheads

    KKR's Banks Fail to Sell $10 Billion of Boots Loans (Update3)


    By Cecile Gutscher and Edward Evans


    July 25 (Bloomberg) -- Deutsche Bank AG, JPMorgan Chase & Co. and six more banks are stuck with 5 billion pounds ($10 billion) of loans for Kohlberg Kravis Roberts & Co.'s purchase of Alliance Boots Plc.


    The banks will keep the senior loans after failing to find investors to buy them, said four people with direct knowledge of the deal, who declined to be identified because the information is private. The banks will sell 1.75 billion pounds of junior ranking loans, after increasing the interest rate and using their underwriting fees to discount the price by as much as 5 percent.


    Wall Street firms, which had no trouble raising money for leveraged buyouts for the past five years, are unable to find buyers at prices acceptable to clients such as Henry Kravis, the co-founder of New York-based KKR. At least 35 companies' borrowing plans were disrupted in the past five weeks, including the $12 billion of loans for Chrysler to finance its takeover by Cerberus Capital Management abandoned by bankers today.


    ``If you're a bank, it's a case of once bitten, twice shy,'' said Willem Sels, head of credit strategy at Dresdner Kleinwort in London. ``The banks won't push so hard for LBOs now. The leveraged loan market will have difficulty recovering.''


    Nick Jansa, a director of capital markets at Deutsche Bank in London, and Kristian Orssten, head of European loans at JPMorgan, declined to comment. KKR spokesman Richard Constant also declined to comment.


    Higher Interest


    KKR and Stefano Pessina agreed to buy Nottingham, England- based pharmacy chain Boots in April in Europe's biggest-ever LBO. The firm and its underwriters last week extended the period for investors to participate in the deal, and held out the possibility of better terms.


    The banks will sell 1 billion pounds of so-called second- lien loans, which rank after senior debt for payment, bankers involved in the deal said. Investors are being offered interest at 425 basis points over the benchmark London interbank offered rate, up from 400 basis points three weeks ago. The banks will sell the debt at 96 percent of face value.


    The underwriters also plan to sell 750 million pounds of mezzanine debt, loans that rank lower than second-lien, increasing interest to 650 basis points over Libor, from 600 basis points, or 6 percentage points, proposed three weeks ago, the bankers said. The mezzanine debt will be offered at 95 percent of face value.


    The discounts will come out of the 2 percent fees charged by the banks to underwrite the loans, or 180 million pounds on the 9 billion-pound financing. Bankers would wind up slicing 77.5 million pounds from their fees, based on the discounts offered.


    More Concessions


    KKR, Blackstone Group LP and other private equity firms will need to make further concessions to borrow the $300 billion Bear Stearns Cos. says they need to pay for buyouts already agreed.


    ``It's certainly a bad signal to the market,'' said David Watts, a strategist in London at research firm CreditSights Inc. ``It not only makes private equity more reluctant to do deals but also the banks. Banks don't want to be stuck with the bridge loans. You're not going to want to stick your neck out.''


    Credit-default swaps on Boots debt jumped to a record. The contracts, used to bet on the ability of the company to repay debt, rose 25 basis points to 450 basis points, according to Citigroup Inc. The contracts traded at 27 basis points before KKR announced its bid. An increase indicates worsening perceptions of credit quality.


    Europe's benchmark iTraxx Crossover Index of credit-default swaps on 50 companies has soared from 180 basis points to 361 basis points since the start of June, Bloomberg data show. The CDX North America Investment Grade Index rose 0.25 basis points to 55.25 basis points today, according to Deutsche Bank AG, the highest in more than two years.


    Three-month pound Libor, an average of rates set daily by banks and used as a borrowing benchmark, is 6.05 percent.


    http://www.bloomberg.com/apps/…sid=abPIOg0EYQy0&refer=uk

    Ja habe ich auch bemerkt, interessant ist aber dass alles was gesagt wird dort 1:1 ins Heute übersetzt werden kann.


    Auf der Portalseite


    http://www.miprox.de/


    wird aber zu neuen, aktuellen Entwicklungen (Crash, Wirtschaft, Finanzen, Klima etc.) Stellung genommen, wie ich meine in einer sehr guten Sammlung von Artikeln, News und Blogs die natürlich oft contra dem mainstream sind, so wie eben im GS Forum.


    Wollte eben nur wissen ob die Seiten in der GS community bekannt sind und darauf aufmerksam machen, nun aber zurück zum Thema Global EC, sorry GB :)

    Es scheint nun immer mehr, dass das Risiko durch das Nicht -an -den - Investor bringen den Banken bleibt.


    Was erschaudert ist die absolut nicht abzuschätzende Menge der gesamten Risikobeträge, kennt die eigentlich wer genau bei den Institutionen (Banken, Fonds) oder tappen die bei den Zahlen auch im Dunkeln?
    So wie es bei BS ;) ausgesehen hat, wo sich in kürzester Zeit ein Hedge Fond der mit 1,5 bln$ bewertet wurde in kürzester Zeit 0 Wert war ist anzunehmen, dass eigentlich keiner was Genaues net weiß und alle diese Produkte nur mehr bald 0 sein werden, ist also IMHO TurboFiat.
    Insofern sind diese Finanzprodukte Vorauseiler (weil extrem geschichtet) Ihrer Basis, nämlich dem FiatMoney, oder?

    schaut auch nicht besser aus, schwere Verluste der Home Builders, Mainstream woes about home crisis ...
    http://finance.yahoo.com/



    Beazer Homes Swings to 3Q Loss
    Thursday July 26, 8:50 am ET
    Beazer Homes Swings to Third-Quarter Loss on Charges, Price Cuts
    http://biz.yahoo.com/ap/070726/earns_beazer.html


    D.R. Horton Swings to 3Q Loss
    Thursday July 26, 7:37 am ET
    D.R. Horton Swings to 3rd-Quarter Loss on Massive Inventory Charges
    http://biz.yahoo.com/ap/070726/earns_dr_horton.html

    Zitat

    Original von GoldVector
    Es scheint nun immer mehr, dass das Risiko durch das Nicht -an -den - Investor bringen den Banken bleibt.


    Was erschaudert ist die absolut nicht abzuschätzende Menge der gesamten Risikobeträge, kennt die eigentlich wer genau bei den Institutionen (Banken, Fonds) oder tappen die bei den Zahlen auch im Dunkeln?
    So wie es bei BS ;) ausgesehen hat, wo sich in kürzester Zeit ein Hedge Fond der mit 1,5 bln$ bewertet wurde in kürzester Zeit 0 Wert war ist anzunehmen, dass eigentlich keiner was Genaues net weiß und alle diese Produkte nur mehr bald 0 sein werden, ist also IMHO TurboFiat.
    Insofern sind diese Finanzprodukte Vorauseiler (weil extrem geschichtet) Ihrer Basis, nämlich dem FiatMoney, oder?


    Habe heute was in der NZZ gelesen, dass sie den gebündelten Plunder nicht mehr weiterverkaufen können, jedenfalls nicht zu den gewünschten Konditionen.


    Die Indizes erholen sich doch wieder. Richtig "lustig" wird es erst, wenn einer oder gar mehrere mit einem Tagesminus von 2 % und mehr schliessen.


    Und nochwas, Goldvector, bevor es Dir Gold_Baron sagt: Nicht drei verschiedene Beiräge kurz hintereinander posten. Dafür gibt es die "ändern"-Funktion, danke! Dient der Uebersichtlichkeit des Forums. :P

    Zitat

    Original von Einsiedler
    Habe heute was in der NZZ gelesen, dass sie den gebündelten Plunder nicht mehr weiterverkaufen können, jedenfalls nicht zu den gewünschten Konditionen.


    Die ganzen PE-Firmen bekommen mittlerweile immer mehr Probleme bei der Finanzierung ihrer Übernahmen (Chrysler schockt die Finanzmärkte). Der Börsengang von Blackstone war diesbezüglich eine gute Warnung ;-).

    Mehr und mehr sickern die Risiken der Hypotheken-blasen, Hedgefonds, Dollarpumping etc. etc in die öffentlichen Medien und damit auch ins Bewußtsein von Otto Normalanleger. Heute wieder nüchterner Beitrag von n-tv.de über herben Dax-Verlust. Ich glaube es geht noch eine Weile runter...

    interessant sind nicht nur die bewegungen in den aktienindizes sondern mal wieder bei den währungen...


    wenn man sich z.b. NZD gegen yen ansieht, könnte man meinen dass das ein aktienindex ist:


    http://c.onvista.de/h_kl.html?…CURR_FROM=NZD&CURR_TO=JPY


    einbruch im februar sowie in den letzten tagen...


    noch krasser ist es bei der türkischen lira zum yen:


    http://c.onvista.de/h_kl.html?…CURR_FROM=TRY&CURR_TO=JPY


    über 5% an einem tag!!


    die blasen laufen weltwelt parallel...aktien und carry trade. aktuell scheint es mal wieder so als würden sie parallel platzen.

Schriftgröße:  A A A A A