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

To: bart13 who wrote (85113)	8/15/2007 6:57:54 PM
From: Pogeu Mahone	Read Replies (1) \| Respond to of 110194

And i do not buy that line of reasoning. EU banks were on the brink last week, so they said U.S. subprime sticking to the party line. Their mortgages are a mess as is our onw mortgage mess. So EU banks are stuck holding the bad paper. What ever they did with the paper ,hold or sell, it is BAD paper today. If the banks have kept them on their books ala U.S. 1990 their banks are bankrupt. The Fed in 1990 let the Bank of New England go under before realizing their mistake. Slightly sane i think not =============== This is the third time I've said "wasn't talking about the housing bubble though, but rather about a slightly more sane banking/mortgage setup without all the packaging and tranches etc. etc."

To: bart13 who wrote (85113)	8/16/2007 8:39:52 AM
From: elmatador	Respond to of 110194

French President Sarkozy and Europe's financial services regulator called for a probe into the response by Moody's Investors Service, Standard & Poor's and other credit-rating firms to the subprime debt rout. Moody's, S&P Face EU Probe on Credit Crisis Response (Update2) By John Glover and Helene Fouquet Charlie McCreevy, EU financial services commissioner Aug. 16 (Bloomberg) -- French President Nicolas Sarkozy and Europe's financial services regulator called for a probe into the response by Moody's Investors Service, Standard & Poor's and other credit-rating firms to the subprime debt rout. Sarkozy told German Chancellor Angela Merkel that the role of rating firms in helping to create debt securities and also assess their risk should be examined. EU Financial Services Commissioner Charlie McCreevy plans to review the governance, management, conflicts of interest and resources of the companies, spokeswoman Antonia Mochan said in a telephone interview from Brussels today. Policymakers in Europe and the U.S. have criticized the New York-based rating firms for misjudging the risk on bonds backed by mortgages to homeowners with poor or limited credit. Some securities fell by more than 50 cents on the dollar in June before Moody's, S&P and Fitch Ratings issued downgrades. U.S. Senate Banking Committee Chairman Christopher Dodd this month said regulators may need to ensure the rating services aren't biased in their assessments of bonds because of fees they earn. ``We have to ask ourselves the exact role rating agencies should play in mapping risks,'' Sarkozy said in a two-page letter dated yesterday and released today. ``Their role, which allies the creation of these products and the risk assessment should be submitted to a careful examination.'' Structured Notes S&P is ``participating in the current review of structured finance ratings'' announced earlier this year by European regulators, said spokesman Martin Winn in London. He declined to comment the Commission's statement. Officials at Moody's and Fitch declined to provide immediate comment. ``The recent subprime crisis and the credit-rating agencies' reaction to the credit-market situation has made it even more important for us to do this,'' Commission spokeswoman Mochan said. Moody's earned $884 million last year, or 43 percent of total revenue, from rating so-called structured notes, according to Neil Godsey, an equity analyst at Friedman, Billings, Ramsey Group Inc. in Arlington, Virginia. That's more than triple the $274 million generated from that business area in 2001. ``The rating agencies were effectively involved in structuring these transactions,'' said Karl Bergqwist, who helps manage $28 billion of debt for Gartmore Investment Management Plc in London. ``While there's absolutely no proof of a decline in standards, there's no doubt issuers were shopping around for the highest rating and the lowest level of investor protection.'' Call for Regulation The rating firms help borrowers structure debt securities in a way that will get the highest possible credit rankings while allowing managers of the securities the most profit, according to Charles Calomiris, the Henry Kaufman professor of financial institutions at New York's Columbia University. ``Rating agencies should be regulated and they should be paid by the investor -- not by the issuer, not by the structurer,'' said Gary Jenkins, a partner at London-based hedge fund Synapse Investment Management, which manages $650 million of debt assets. ``It's so obvious, so simple that it's the one thing that probably won't happen. They shouldn't be paid by the people selling the bonds.'' -- With reporting by John Martens in Brussels. Editor: Serkin (cjm) To contact the reporters on this story: John Glover in London at johnglover@bloomberg.net ; Helene Fouquet in Paris hfouquet1@bloomberg.net