Complacency … or just month end?

Watch out for next weeks action as we prepare for the JUNE FUTURE EXPIRATION …

Over the last days, markets seem to be rising again … against all news one finds

Today’s masterpiece … and nobody noticed it …

According to Bloomberg news, Moody’s has a new ratings unit !!!

An analytical team which operates separately(!!!) from the ratings division & uses CDS prices as an alternative ratings system.

The implied ratings disagree(!!!) with the more conventional Moody’s rating division.

According to conventional Moody’s ratings of bond insurers – these companies are in great shape, but the Moody’s implied rating system suggests they are in “dire danger of defaulting on their debt” & gives a rating of Caa1 to both MBIA & AMBAC. !!!!!

The big difference is that the conventional Moody’s ratings system was designed to remain stable & not influenced by short term market ripples as opposed to the volatile swap-implied ratings (CDS). While the implied ratings are amore accurate predictor of defaults over the past year, the CDS market often ends up coming back towards the Moody’s conventional rating.

But in the case of manipulation ???

Watch out and REMEMBER …

Dt. Bank CEO Ackermann referred to it as a FINANCIAL TSUNAMI!!!

Have a good weekend!

Tags: bond insurers, expiration, financials, Moody's

This entry was posted on Freitag, Mai 30th, 2008 at 15:41 and is filed under FDAX. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.