Wednesday, January 16, 2008

Another massive subprime writedown coming

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 (430 views)
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One thought on “Another massive subprime writedown coming

  • 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.

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