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Trading Now

Thursday, March 5, 2009


LONDON (Reuters) - The Bank of England cut interest rates by 50 basis points on Thursday to a record low of 0.5 percent, and said it would buy 75 billion pounds of assets to expand the money supply and aid a recession-hit British economy.

GM auditors raise the specter of bankruptcy
General Motors Corp.'s auditors have raised "substantial doubt" about the troubled automaker's ability to continue operations, and the company said it may have to seek bankruptcy protection if it can't execute a huge restructuring plan. "The corporation's recurring losses from operations, stockholders' deficit, and inability to generate sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern," auditors for the accounting firm Deloitte & Touche LLP wrote in the report....

Obama administration launches foreclosure-relief plan
Data show about 20% of U.S. homeowners with mortgages are "under water," meaning they owe more than their home is worth. The Obama administration's $75 billion plan enables even those homeowners with negative equity to modify their loans. The program targets homeowners who are facing imminent hardship. Meanwhile, the administration continues to push for legislation that would give bankruptcy judges the authority to alter mortgage terms. Reuters (04 Mar.)

Moody's eyes downgrading collateralized loan obligations
Moody's said it changed the way it assesses the riskiness of collateralized loan obligations, and most of the market faces the possibility of rating cuts. The move affects all but the most senior bonds issued by hundreds of CLOs worldwide. The complex investment vehicles were already under pressure because their underlying leveraged loans were downgraded and because of the prospect of more bankruptcies and restructurings. Financial Times (04 Mar.)

Ford offers cash, stock to cut $10 billion in debt
Ford Motor plans to exchange as much as 40% of its debt for cash and stock. The move comes as Ford tries to remain competitive with General Motors and Chrysler, which both received rescue funds from the U.S. government. "This is all part of a restructuring plan to make the company healthier in the end," Ford spokesman Mark Truby said. BusinessWeek/The Associated Press (04 Mar.)


  1. 1. Obama's foreclosure relief plan, a/k/a "kick the can", allows you to extend the mortgage/interest while lowering the monthly payments. So now you can stay in your underwater house for ever and ever. And your children and grandchildren can continue paying long after you're dead. Kinda like those IO mortgages.
    2. Moody's?? More like Rip Van Moody's. In related news Moody's just announced it was downgradng Countrywide and Lehman from "Aaa" to "Aa1".

  2. and who does this really help? imagine, 40year mtg. only banks come out in the end.
    and don't get me started on these rating agencies. they are whats helping fuel downward spiral today in mkt. all the way down to 4000. good for me, not good for investors



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