Damned if they do, damned if they don’t, politicians the world over are looking pretty sheepish right now. Nationalizing failed banks, mortgage lenders and insurance firms hardly makes for a strong election pitch. It won’t do much to coax fresh risk capital into shoring up financial balance-sheets, either. But letting them fail would only look worse…
Freddie Mac’s Grim Quarter; Sprint Swings to 2Q Loss; Time Warner Could Dump AOL; Lonmin Rejects Xstrata Offer; Ambac Posts Record Net Profit; Playboy Stripped of Earnings; Oil Prices Continue Slide
In Far East trading on Monday, both gold and silver rose gently until later in their trading day. From there they began an equally gentle decline (dollar related?) that lasted all through London trading until the moment the Comex opened. Then it was lights out as the bullion banks pulled their bids and the floor price evaporated in a heartbeat.
Moody’s Investors Service on Friday downgraded the debt rating of key bond insurers MBIA Inc. (MBI) and Ambac Financial Group Inc. (ABK), increasing expectations that more write-downs are in the offing for the U.S. financial-services sector, which has already written off nearly $400 billion in losses.
Moody’s Investors Service, subsidiary of Moody’s Corp. (MCO), downgraded MBIA to A2 from Aaa, and Ambac from Aaa to Aa. The downgrade caused MBIA shares to shed more than 13% of their value, with an 86-cent decline to close at $5.59 on Friday. Ambac shares fared a bit better, gaining 2 cents to close at $2.05.
Moody’s downgrades follow similar reductions from Standard & Poor’s and Fitch Ratings Inc.
U.S. Federal Reserve policymakers will likely cut its key interest rate to 2.0% from 2.25% this, which would mark the seventh such move since the central bank launched its rate-reduction campaign in mid-September.
Ambec Bombs in First Quarter; Liberty Mutual to Buy Safeco for $6.2 Billion; Ballmer Ready to Walk on Yahoo Bid; Mortgage Applications Plummet; Rice in Short Supply; Communication Shares Jump on Rosy Outlook.