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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Ramsey Su who wrote (39607)	8/24/2005 4:43:10 PM
From: mishedlo	Respond to of 110194

Moody's cuts Ford Motor's sr unsecured debt to junk (F) By Carla Mozee SAN FRANCISCO (MarketWatch) -- Moody's Investors Service on Wednesday lowered the ratings of Ford Motor Co.'s (F) senior unsecured debt to Ba1 from Baa3, and assigned a Ba1 corporate family rating and an SGL-1 speculative grade liquidity rating. It also lowered Ford Motor Credit Co.'s senior unsecured rating to Baa3 from Baa2, and short-term rating to prime-3 from prime-2. The outlook for both companies is negative. Moody's said the downgrades reflect further erosion in Ford's operating results and cash flow generation, and noted that those factors are expected to result in a pretax loss from automotive operations for 2005. Since improvement in Ford's cost structure can only be implemented over a period of time, said Moody's, financial performance is expected to remain weak.

To: Ramsey Su who wrote (39607)	8/24/2005 4:45:00 PM
From: mishedlo	Respond to of 110194

I can't believe you guys. 80 months after I practically begged you guys to do yourself a favor by listening to the SAX conference call, you finally did it? <ggggg> Are you suggesting our timing was bad? ggg Mish

To: Ramsey Su who wrote (39607)	8/24/2005 4:49:13 PM
From: russwinter	Read Replies (2) \| Respond to of 110194

The rats are in big time CYA mode. I think the request to "reduce derivative trading until this gets cleared up" is ominous. Do the Wizards just open up the flood gates in the meantime though? Fed Summons 14 Banks to Discuss Credit-Derivatives Controls Aug. 24 (Bloomberg) -- The Federal Reserve Bank of New York invited 14 of the 'major participants' in the credit- derivatives market to a meeting next month amid concern the $8.4 trillion industry is rife with unconfirmed trades. The meeting at the Fed's New York office on Sept. 15 will focus on market practices, according to an Aug. 12 letter sent to bank chief executives by New York Fed President Timothy Geithner. Fed spokesman Peter Bakstansky confirmed the letter's contents and declined to name the firms invited. The credit-derivatives market more than doubled in the past year, giving companies, investors and governments the ability to bet on or protect against changes in credit quality. A backlog of confirmed trades may undermine investor confidence, a group led by E. Gerald Corrigan, managing director at Goldman Sachs Group Inc. and a former New York Fed president, said last month. The Counterparty Risk Management Policy Group, the banking industry group led by Corrigan that first met in 1999 after the collapse of hedge fund Long-Term Capital Management, said in a report on July 27 that 'urgent' effort is needed to tackle the 'serious' accumulation of trade confirmations. Banks should be prepared to consider reducing trading until the deals are confirmed, the report said. JPMorgan Chase & Co., Deutsche Bank AG, Goldman Sachs Group Inc., Morgan Stanley and Merrill Lynch & Co. dominate the credit- derivatives market as the five most-cited trading partners, according to Fitch Ratings. 'Senior' Executives The Fed's letter said 'a senior business representative and a senior risk management person,' should attend the meeting. Credit derivatives are the fastest growing part of the $24 trillion derivatives market, based on the so-called notional value of the debts underlying the contracts. A derivative is a financial obligation whose value is derived from interest rates, the outcome of specific events, or the price of underlying assets such as debt, equities and commodities. Investors use credit-default swaps to bet on a company's creditworthiness or protect against non-payment. The contracts are the most common credit derivative. Like insurance, buyers pay an annual fee similar to a premium to protect a certain amount of debt against default for a specified number of years. In the event of a default, they get the face value of the bonds or loans. The settlement process for credit-default swaps is resource intensive, and typically requires faxed signatures. Banks and companies risk getting swamped by investors seeking settlement on their contracts in the event of a corporate default, Corrigan's group said. Derivatives traders must ensure they have systems and controls in place to keep up with the growth in their business, the U.K.'s Financial Services Authority said in a letter to companies this year.