BOA DEATHWATCH: RATINGS ON BANKS STARTING LONG JOURNEY DOWN

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EDITOR’S COMMENT: Banks have started their long descent into oblivion with the first round of ratings cut. Barely a ripple a this time because the Federal Reserve continues to lend to them at near zero rates. Ultimately, however, this is a signal to the financial world that the system and the individual mega Banks are at great risk, once the truth is told. The truth is that their capital as reported is untrue. It includes hundreds of billions, if not trillions of dollars worth of “assets” that are shown relating to consumer debt — but the debt was securitized, which means that it was long ago sold to investors.

Thus it is impossible for two people to own 100% of the same thing. With the investors having advanced the funds for the debt obligations, it seems highly unlikely that the Banks will be able to maintain this charade of claiming it as assets on one hand and suing on behalf of investment “trusts” on the other to enforce them.

S&P downgrades top US banks’ credit ratings

By EILEEN AJ CONNELLY, AP Business Writer

NEW YORK (AP) — Standard & Poor’s Ratings Services has lowered its credit ratings for many of the world’s largest financial institutions, including the biggest banks in the U.S.

Bank of America Corp. and its main subsidiaries are among the institutions whose ratings fell at least one notch Tuesday, along with Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Wells Fargo & Co.

S&P said the changes in 37 financial companies’ ratings reflect the firm’s new criteria for banks, and they incorporate shifts in the industry and the role of governments and central banks worldwide. The agency did not release its evaluation of each company but said it plans to discuss the changes during a conference call early Wednesday.

Bank of America’s issuer credit rating was cut to “A-” from “A,” as were its Countrywide Financial Corp. and Merrill Lynch & Co. Inc. units, along with a series of related subsidiaries

Ratings downgrades are never seen as positive, but this round may be particularly damaging for Bank of America.

Concern already was growing Tuesday about whether B of A has enough capital to withstand another downturn in the U.S. economy or further trouble in Europe, and the bank’s stock fell to a two-year low before the ratings announcement.

The Charlotte, N.C.-based bank said in a recent regulatory filing that downgrades from S&P or Fitch Ratings, which also is reevaluating its ratings, “could likely have a material adverse effect on our liquidity” and cut off its access to credit markets.

It typically costs companies more to borrow when their credit ratings are cut, the same way a decline in a person’s credit scores drives up the interest rates that banks and credit cards will offer him.

Downgrades could hurt parts of the bank’s businesses where creditworthiness is critical, Bank of America said in a filing Nov. 3 with the Securities and Exchange Commission.

A downgrade also could trigger provisions in derivative contracts that require B of A to put up more collateral, and it could terminate the contracts, resulting in losses and hurting the bank’s liquidity. The bank posted a $6.2 billion profit for the third quarter, mostly the result of accounting gains and the sale of a stake in a Chinese bank, but it was still moving toward a loss for the year as of Sept. 30.

Bank of America shares fell 17 cents, or 3.2 percent, to close Tuesday at $5.08 and lost another penny after hours.

S&P cut its rating on Citigroup Inc.’s credit to “A-” from “A”; a series of its subsidiaries also saw changes. Citigroup shares closed up 19 cents, at $25.24, and lost 14 cents aftermarket.

Goldman Sachs also was cut to “A-” from “A,” which triggered some downgrades for subsidiaries. The investment bank’s shares closed regular trading down $1.62, at $88.81, and lost another 12 cents in late trading.

JPMorgan Chase’s rating also dropped to “A” from “A+,” and its Chase Bank unit was downgraded to “A+” from “AA-” and other subsidiaries ratings also changed. JPMorgan Chase took the place of Bank of America as the nation’s largest bank in recent months.

The bank’s stock lost 6 cents aftermarket after closing the regular session down 60 cents, or 2 percent, at $28.56.

Morgan Stanley’s rating slipped to “A-” from “A” and several of its units also got cut one notch. Shares slipped 9 cents in late trading from their close down 49 cents, or 3.6 percent, at $13.31.

Wells Fargo fell to “A+” from “AA-” which likewise triggered downgrades for several subsidiaries. Shares closed down 7 cents at $24.08, then lost 18 cents aftermarket.

In addition, Bank of New York Mellon Corp., the sixth biggest bank in the U.S., was cut to “A+” from “AA-,” and some units were downgraded. Bank of New York Mellon is a custodian bank, which collects dividends on stocks and holds cash deposits, among other things, on behalf of its customers, which are mainly large pension funds and money market funds. The stock closed down a penny at $18.08, then lost 8 cents in late trading.

Top U.K. downgrades include Barclays PLC, HSBC Holdings PLC, Lloyds Banking Group PLC and The Royal Bank of Scotland.

Ratings for several big European banks, including Credit Suisse, Deutsche Bank, ING Groep N.V. and Societe Generale were unchanged, but in some cases they were given a “negative” outlook.

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13 Responses

  1. Nice rendition. I agree.
    Here is my case in a nut shell, but I forgot to bring up a Federal Cause of action other than wrongful debt collection on my civil cover sheet, opps may be he will allow me to amend my Cause of Actions:(OCWEN)DEUTSCHE BANK NATIONAL TRUST COMPANY,AS TRUSTEE UNDER POOLING AND SERVICING AGREEMENT AS OF APRIL 1, 2007 SECURTITIZED ASSET-BACKED RECEIVABLES LLC TRUST 2007-BR2 MORTGAGE PASS-THROUGHT CERTIFICATES,2007 BR2 note holder declared unsecured and tendered by Bankruptcy Discharge Exhibit A has sold PLAINTIFFS property without the requisite power to do so, a taking, violating US article 14 of the constitution, US 1692 unfair debt collection, and US Bk7 Discharge rules. The original lender in Exhibit B purported mortgagee (NOT CLEAR BY TILA OR RESPA rules) Ameripath has a default judgment against it, Exhibit C. The True lender is unknown and DEED OF TRUST (DOT) § of Uniform Covenants ¶ 24 Substitute Trustee, states “Lender, at its option , may from time to time appoint a successor trustee to any trustee appointed hereunder by an instrument executed and acknowledged by Lender (this is not the beneficiary MPA ¶ 12-13 page 1) and recorded in the office of the Recorder of the county in which the Property is located…….. by Applicable Law. This procedure for the substitution of trustee shall govern to the exclusion of all other provisions for substitution.” substitution of trustee transfer rights “ “to Ameripath who failed to record any transfer to a new Lender making any such TRUSTEE SALE (TS) void. Plaintiffs filed a quiet title action, injunctive relief to stop NOTICE OF TRUSTEE SALE (NTS) (THUS WRONGFUL TS ), and wrongful foreclosure September 8th, 2:11-cv-02370-LKK-DAD. Base on the above TS on 10-28-2011 was an illegal taking of the PLAINTIFFS property in violation of the US Constitutional protection Article 14.

    The requirement of Perfected Title under CCP § 2924 for OCWEN’S action has failed to be shown.

    I need help to find all Federal Statues the may be reference to the court. The USED Magistrate Judge said I did not have a Federal Cause of Action in my complaint but has taken it under submission which was good since he did not through it out.

  2. Here in CA I know our government lodges our taxpayer;s money channeled for social services (people living broken lives) in this case unemployment benefits …are deposited in BOA. Making money off of us again…are our people THAT stupid? Lets wake up folks. The other was Salem, Mass. article of the General Recorder smolderingly pissed that he has requested the city coffers not be deposited in BOA (which in his position he is the one to dictate that for the city) and yet he keeps being blocked. And it was something like 15m (?). So making more money off of us there. SOMEONES are pulling the strings on this web. Awake UP. Create ‘strategic Solutions”…w/ the philosophy of ‘through as much as you can on the wall and see what sticks”…..

  3. A Man: Very true – he’s the one who appointed them. So much for hope and change that I voted for. And to borrow your line, “NEVER AGAIN”.

  4. Leapfrog What about Obama the ringleader? Blaming everybody but himself.

  5. “The banks cannot figure out how to modify a few hundred million dollars in loans over years, but the Fed and the banks can figure out how to engineer trillions in dollars in complex transactions….overnight…..

    Read this article and understand that worldwide banking today is nothing but crazy gambling….with our money….when will calls for arrest of Geithner and Paulson start resonating?”

    http://mattweidnerlaw.com/blog/2011/12/banks-cant-process-loan-modifications-or-short-sales-but-can-do-trillion-dollar-swaps-instantly/

  6. Not so fast, banksters…

    http://www.zerohedge.com/news/market-stumbles-conservatives-push-end-imf-bailout

    For once, the clowns in CONgress do something right.

  7. DYLAN RATIGAN CLIP:
    CONGRESS GETS TO DO INSIDER TRADING LEGALLY:

    http://www.msnbc.msn.com/id/37560195/#45514370

  8. @ Enraged: If you actually read the article, you’ll see that this “European rescue” is actually yet another backdoor bailout of U.S. banks, banks that themselves have HUGE undisclosed problems relating to undisclosed swaps with their undisclosed European counterparties. (It’s right there in the link.) And I suspect that other large U.S. banks are counterparties to the largest U.S. bank counterparties (hedging their swaps), and so on…

    This latest Fed move wasn’t about “helping” “everybody else,” but more of same, disguised as American “support” of the European, if not, global economy. And, based on your response, the Fed and media succeeded in misleading you as well.

    Neil: You should read Ms. Prins’ article. It’s relevant.

  9. Enraged they just bailed out our banksters.
    Look at the BAC’s Stock is surging today.

    http://quotes.wsj.com/BAC

    By next week it will back to the low $5’s or in two to three weeks.

    Dont buy into the propoganda that the United States gives out free money. There is always a twist.

    NEVER AGAIN
    G-D BLESS AMERICA

  10. @dny,

    I’ve decided that I wouldn’t read those anymore. There we are with unsolvable problems in this country and we find nothing better to do than go help everybody else.

    There has to be a method to that madness. Tell me there is, pleaaaaase!

  11. Check out Nomi Prins’ latest article on the Fed’s “European Rescue”

    http://www.nationofchange.org/fed-s-european-rescue-another-back-door-us-bank-goldman-bailout-1322759036

  12. The sooner these bastards go out of business, the better!

  13. I never really understood those ratings anyway. AA-, A+, AAA+, what is that? Is there a method to that madness? They owe US trillions but they’re still up there in digit. Go figure!

    Guess the bonuses ain’t gona be $20M this year… No, wait! What am I thinking? Of course! The lousier their ratings, the higher the bonuses, right?

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