S&P cut Bear Stearns’ credit rating after the company announced plans to write down $1.2 billion in subprime assets, which will likely result in its first quarterly loss since 1985 when the company went public. After the rating was revised from A+ to A, the stock price actually rose because the writedown was smaller than other securities firms’. Citigroup got its ratings lowered after writedowns of $9 billion and Merrill Lynch & Co was downgraded on writedowns of $8 billion.
Meanwhile, Wells Fargo’s CEO John Stumpf, speaking at an investment conference, predicted that the worst is yet to come for the housing market. He said that this is the worst Real Estate market he’s seen in his 30-year career, and 2008 will probably be even worse. Wow he actually said that.
2 comments:
I would tend to agree with Mr. Stumpf. I think 2008 will be dreadful for most lenders.
Many homeowners bordering on default will be pushed over the edge with current gas prices. The media tends to focus solely on individuals already in default, what about the millions of homeowners that are barely able to make their payments each month. There comes a point when they just can’t piece it together anymore, and for many that time is coming very soon.
Exactly. We don't see mortgage lenders actually admitting there's trouble in the air every day, do we?
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