Will Meredith Whitney Be Proven Right In The End? - News and Current Events | futures io social day trading
futures io futures trading


Will Meredith Whitney Be Proven Right In The End?
Updated: Views / Replies:294 / 0
Created: by Quick Summary Attachments:0

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors – all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you don’t need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 
Thread Tools Search this Thread
 

Will Meredith Whitney Be Proven Right In The End?

  #1 (permalink)
Quick Summary
Will Meredith Whitney Be Proven Right In The End?

We noted, in September, that corporate bond downgrades were outpacing upgrades very notably and today we get the other side of that with Moody's noting that in Q3, Muni downgrades outweighed upgrades by the most since the financial crisis began. At 5.3 to 1, the third quarter of 2011 had the highest downgrade-to-upgrade ratio of any quarter for the U.S. public finance sector since the onset of the financial crisis in 2008. "A rapid deterioration in credit metrics led to a higher-than-average 14 multi-notch downgrades."

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).


While the number of defaults (and size) has hardly been what Ms. Whitney expected, and the overall performance of Muni bonds has been strong - especially relative to corporates - the volumes of downgrades from S&P and Moody's is definitely 'unusual' from a cyclical perspective and we note the rather systemic decompression between General Purpose Revenue bonds vs high-quality G.O.s.

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).


Moody's 'government' upgrade/downgrades over past few years from Bloomberg's RATT screen.

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).


S&P's upgrade/downgrades over the past few years.

And from Moody's:




At 5.3 to 1, the third quarter of 2011 had the highest downgrade-to-upgrade ratio of any quarter for the U.S. public finance sector since the onset of the financial crisis in 2008, says Moody's Investors Service in its quarterly report on rating activity in the sector. The previous high of 4.6 to 1 was registered in the fourth quarter of 2010.



"Downgrades dominated rating revisions across all public finance sectors except for healthcare," said Assistant Vice President-Analyst Dan Steed, author of the report. "A rapid deterioration in credit metrics led to a higher-than-average 14 multi-notch downgrades."



The impact of deficit-cutting measures by the federal and state governments will be a key driver of rating changes across public finance sectors as the strains on core operating expenses and revenue sources of the last three years will likely persist over the next year, according to Moody's.



"This will be mostly due to economic stagnation, high unemployment, declining home values, and low consumer confidence," said Steed. "We expect downgrades to continue exceeding upgrades in upcoming quarters."



--State ratings: Downgrades outpaced upgrades by 10 to 1, as transit and highway revenue bonds accounted for 60% of the downgrades. We expect the trend to continue against a backdrop of federal budget cuts, and lackluster revenue growth exacerbated by increased reliance on personal income taxes.



--Local governments: At 9 to 1, the ratio of downgrades to upgrades significantly exceeded totals (3 to 1)of the prior quarter. Similar to the first half of 2011, school districts were challenged by declining property tax revenues, as well as reduced state funding. A total of 26 local government issuers were downgraded by multiple notches given the sharp deterioration in their financial metrics.



--Not-for-profit hospitals: Upgrades outpaced downgrades for only the second quarter in the last two years. We do not expect this positive trend to continue, especially for smaller-sized hospitals, given continued pressures on major revenue sources such as Medicare.



-- Higher education and other not-for-profits: Ongoing operating pressures and strained liquidity drove the elevated level of downgrades. Unlike the previous two quarters, there were no multi-notch downgrades of higher education or not-for-profit credits. Over the near term, the number of downgrades will likely continue to exceed upgrades due to operating challenges and strained liquidity.



--Infrastructure: The third quarter's single upgrade was significantly overshadowed by 18 downgrades. Downgrade activity might stabilize as operating conditions for infrastructure credits are likely to stabilize over the next year unless economic growth declines precipitously.



--Housing: Continued challenges in the housing and mortgage market led to another quarter in which downgrades exceeded upgrades by a material 3-to-1 margin. The outlook remains negative due to high delinquency and foreclosure rates, low reinvestment rates, and the deterioration of counterparty credit quality.

It is worth bearing in mind that if downgrades continue and Munis underperform then the MtM changes may well be enough to drive significant negative pro-cyclical behavior as the typical investor (in a similar way to Italy bond holders perhaps) is not used to seeing capital depreciation while they earn their modest yield. Perhaps that is the catalyst - further downgrades, fund outflows on price depreciation, and exaggerated liquidity dry ups - as opposed to simple fiscal concerns?

Charts: Bloomberg



More on ZeroHedge...

Reply to share your thoughts on this current event.


Reply



futures io > > > > Will Meredith Whitney Be Proven Right In The End?

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

Linda Bradford Raschke: Reading The Tape

Elite only

Adam Grimes: TBA

Elite only

NinjaTrader: TBA

January

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
'Incredible Opportunities' for Investors Right Now: Whitney Quick Summary News and Current Events 0 September 14th, 2011 01:40 PM
Investors Back Buying Munis Despite Whitney’s Dire Warning Quick Summary News and Current Events 0 June 10th, 2011 06:20 PM
Meredith Whitney to Goldman: What's the Endgame? Quick Summary News and Current Events 0 April 19th, 2011 07:00 PM
Regional Bank Profits to Get Hit By New Regulations: Whitney Quick Summary News and Current Events 0 November 11th, 2010 07:40 PM
Banks Continue to Suffer From Lackluster Revenue: Whitney Quick Summary News and Current Events 0 August 3rd, 2010 07:20 PM


All times are GMT -4. The time now is 04:53 AM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-12-13 in 0.08 seconds with 19 queries on phoenix via your IP 54.92.194.75