Wednesday, Jan 16, 2008
Another massive subprime writedown coming
FT: Brace yourselves
S&P announced it was adjusting its cumulative loss measure on 2006 subprime collateral to 19 per cent - up from 14 per cent:
It will mean huge new downgrades on CDO tranches from the 2005 vintage through to 2007 - the majority of the market, in other words.
We suspect this will push hundreds more CDOs through “events of default” and a significant number into liquidation - a likely repeat of the disastrous events in November and December, when CDOs went into meltdown and banks were forced to admit further humiliating writedowns.
Posted by genie @ 11:10 AM (180 views) Add Comment
1 Comment
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1. submedia said...
Significant news. If the insurer loses its AAA rating then the items it"s holding which are of much (actual) lower ratings will be forced a re rating and write down and then it all goes poo poo.