Oh dear

Standard & Pooh (not a typo), the alleged credit ratting (not a typo) agency, yesterday announced that a mere 612 US subprime residential mortgage-backed securities, with a farce (not a typo) value of $12 billion, are now on CreditWatch with negative implications. A few hours later, Grumpy’s (d/b/a Moody’s) piled on, downgrading 399 issues, and placing 32 on review for possible downgrades.

Timing their announcement to coincide with NakedShorts’ temporary absence from his turret, the shocking, shocking disclosures are already the subject of extensive ink-and-pixels elsewhere, and at least some of that 148 point downgrade in the Dow Jones Industrial Average yesterday. The two-cents-worth from here:

• Does anybody else remember that it was just three short months ago that S&P managing director Susan Barnes—heard yesterday discussing new surveillance methodologies—appeared before Congress, chirping that just 0.3 per cent of 2006 issuance had been downgraded, and that S&P believed that ratings on RMBS would not be negatively affected. And
• In an unrelated development, The Same Old Cartel announced that, effective immediately, a ‘B’ rating now means Bupkiss. As in, that’s how much gets repaid. ‘BB’ is upgraded to Big Bupkiss. (© Alec Smart, a correspondent.)

More leaking drums after jump.

The Subprime Mortgage Market
Standard & Poors
(Links to three press releases issued Jul. 10, and the sold-out conference call (available until Jul 17)).

399 Subprime RMBS Downgraded, 32 on downgrade review
Moody’s Investor Services
Press release Jul. 10 2007

Earlier on NakedShorts
Moody’s upgrades downgrading
Jun. 18 2007