Friday, December 14, 2007

Taking One For The Team

Citi grins and bears it. Our Jolly Bankers are scared shitless, and for good reason. Bloomberg (12.14.07):
"Citigroup Inc. will take over seven troubled investment funds and assume $58 billion of debt to avoid forced asset sales that would further erode confidence in capital markets.

Moody's Investors Service lowered the bank's credit ratings.

Citigroup Rescues SIVs With $58 Billion Debt Bailout

"The biggest U.S. bank by assets will rescue the so-called structured investment vehicles, or SIVs, taking responsibility for their $49 billion of assets, the New York-based company said in a statement late yesterday."

"Citigroup follows HSBC Holdings Plc, Societe Generale SA and WestLB AG in bailing out SIVs to avert fire sales of assets."

Don't forget the money the Master-Liquidity Enhancement Conduit is getting ready to pump into these things.

In the meantime. Bloomberg (12.14.07):

"Black & Decker Corp., the largest U.S. power-tool maker, lowered its quarterly and annual profit forecasts because of costs tied to a recall and a slowdown in U.S. consumer spending. The shares fell the most in a year."

Black & Decker Reduces Fourth-Quarter Profit Forecast

Black & Decker's been getting killed for over a year now.

And if that wasn't enough, Bloomberg completes the trifecta (12.14.07):

"For U.S. homeowners, builders, bankers and realtors, the crash of 2007 will only get worse in 2008.

Everyone from mortgage-finance company Fannie Mae to Lehman Brothers Holdings Inc. expects declines next year."

Housing Crash Deepens in 2008 as U.S. Realtors See Record Drop

"Existing home sales will drop 12 percent and existing home prices will fall 4.5 percent, Washington-based Fannie Mae says. Lehman analysts estimate almost 1 million mortgage loans will default in 2008, up from about 300,000 this year.

"'We're only halfway through the housing shock,' said Ethan Harris, chief U.S. economist at New York-based Lehman, the fourth-biggest U.S. securities firm by market value. 'It's just a matter of time before the weakness spreads to the rest of the economy.'"

Half way through? Considering what's looming over the horizon, that may be a little optimistic.

Labels: ,


Post a Comment