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Microcap & Penny Stocks : Rat dog micro-cap picks... -- Ignore unavailable to you. Want to Upgrade?

To: wyllisx2 who wrote (33453)	3/2/2007 8:46:24 AM
From: Bucky Katt	Respond to of 48461

Goldman, Merrill Almost `Junk,' Their Own Traders Say>>>WOW> March 2 (Bloomberg) -- Goldman Sachs Group Inc., Merrill Lynch & Co. and Morgan Stanley, which earned a record $24.5 billion in 2006, suddenly have become so speculative that their own traders are valuing the three biggest securities firms as barely more creditworthy than junk bonds. Prices for credit-default swaps linked to the bonds of the New York investment banks this week traded at levels that equate to debt ratings of Baa2, according to Moody's Investors Service. For Goldman, Morgan Stanley and Merrill Lynch & Co., that's five levels below the actual Aa3 rating on their senior unsecured notes and two steps above non-investment grade, or junk. Traders of credit derivatives are more alarmed than stock and bond investors that a slowdown in housing and the global equity market rout have hurt the firms. Merrill since 2005 has financed two mortgage lenders that subsequently failed and purchased a third, First Franklin Financial Corp., for $1.3 billion. ``These guys have made a lot of money securitizing mortgages over the years in a mortgage boom time,'' said Richard Hofmann, an analyst at bond research firm CreditSights Inc. in New York. ``The question now is what is the exposure to credit risk and what are the potential revenue headwinds if they're not able to keep that securitization machine humming along.'' Credit-default swaps on the debt of Goldman, the world's biggest securities firm, have risen to $32,775 per $10 million in bonds, up from $21,500 at the start of the year, according to prices compiled by London-based CMA Datavision. The price touched $35,000 on Feb. 28, the highest since June 2005. Spokesmen and spokeswomen for Goldman, Lehman, Merrill and Morgan Stanley declined to comment. A spokeswoman for Bear Stearns didn't immediately return calls for comment. Conceived to Protect Morgan Stanley and Goldman were among the top five traders of credit-default swaps in 2005, a group that represented 86 percent of the market, according to a September Fitch Ratings report. Lehman, Merrill and Bear Stearns were among the top 12. Credit-default swaps that trade at such wide gaps below actual ratings tend to rally, said David Munves, director of Moody's credit strategy research group. The contracts were conceived by Wall Street to protect bondholders against default and pay the buyer face value in exchange for the underlying securities should the company fail to adhere to debt agreements. An increase in price indicates a decline in the perception of creditworthiness; a drop means the opposite. Contracts tied to Morgan Stanley, Merrill, Lehman Brothers Holdings Inc. and Bear Stearns Cos. also are at 19-month highs. Morgan Stanley credit swaps have risen $10,000 to $32,775 this year, CMA data show. Contracts on Merrill jumped to $33,000 from $16,500. For Lehman, they are up $12,440 to $34,440, and the swaps on Bear Stearns have climbed to $33,830 from $21,750. By contrast, Deutsche Bank AG in Frankfurt, Germany, is trading near a record low at 9,800 euros, according to data compiled by Bloomberg. more> bloomberg.com

To: wyllisx2 who wrote (33453)	3/21/2007 1:14:58 PM
From: Bucky Katt	Read Replies (2) \| Respond to of 48461

OBCI has a nice range today 2.75-3.50