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The Online Merriam-Webster Dictionary describes alchemy as “a power or process of transforming something common into something special” or “aiming to achieve the transmutation of the base metals into gold.”  Well, it seems Morgan Stanley is engaging in some financial alchemy because it is about to trade near-junk rated paper for Aaa gold-standard bonds (hat [...]

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PIMCO’s founder Bill Gross is out with his latest monthly missive.  It makes for interesting reading, especially in regards to the captains of finance and their desire to stay rich using other people’s money.
I remember as a child my parents telling me, perhaps resentfully, that only a doctor, airline pilot, or a car dealer could [...]

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The first time I wrote about the Baltics was back in August in a post entitled, “Are the Baltics the new Argentina?.” Since then, things have gotten progressively worse and the Baltics are clearly in Depression with Latvia leading the way to the downside. The credit ratings agencies have caught on to this [...]

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Standard and Poors had their hands full today cutting credit ratings.  They cut Ireland. But, they also cut Hungary, putting the country just above a junk credit rating.  I don’t think these will be the last sovereign debt ratings downgrades, especially in emerging markets — economies worldwide are deteriorating.
The Brown Brothers Harriman currency group has [...]

By now you have heard that Warren Buffett’s bets on GE, Goldman, and Swiss Re and his derivatives positions have earned him a downgrade from Fitch Rating Agency. Below is the Fitch statement. I have highlighted the key sections.

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Read it at Alphaville:
Standard & Poor’s Ratings Services today lowered its long-term ratings on General Electric Co. (GE) and units, including General Electric Capital Corp. (GECC), by one notch to ‘AA+’ from ‘AAA’. We affirmed the ‘A-1+’ short-term credit ratings. The outlook is stable.
The main factor in the downgrade was our assessment of the stand-alone credit [...]

Now GE has finally cut, but will they be able to maintain their AAA rating?

McGraw Hill is one of the major book publishers in the United States. It also happens to own Standard & Poors, a well-known rating agency. Fellow econblogger Barry Ritholtz was due to release a book via McGraw Hill titled “Bailout Nation.” In the book, he gets a bit rough with the rating agencies, which I see as analogues to the accounting firms in the shenanigans of the late 1990s.

Guess what? McGraw Hill, abruptly canceled the book, shortly before its release was due. Apparently, this is how business in the United States is conducted. Shambolic, if you ask me.

Here’s what Barry has to say.

I just picked up two reports on California’s desperate situation. California, whose legislature and Governor have been hold up in around the clock negotiations, is now issuing IOU’s instead of cash. They have also been downgraded by Moody’s credit rating agency. The first story came from the well-known political site Monsters & Critics. And it demonstrates that California is on the verge of bankruptcy:

With the economy weakening significantly around the globe, the budgets of sovereign nations are coming under increased pressure. As a result S&P has put a number of countries under review for potential credit downgrades. However, now, the first actual cut is in: it is Greece.