The latest downgrades from S&P – testament to the fact that the structured finance unwind isn’t yet unwound:
330 US CDOs put on credit watch negative
80 second lien RMBS cut to ‘D’
65 Alt-A RMBS ratings cut
28 European synthetic CDOs on credit watch negative
It’s also worth noting that more than $200bn of CDOs have now breached default triggers: more than double the highest estimates from earlier this year.
Update – 11:37 BST
Hedge fund manager John Paulson – of credit shorting fame – is still short credit, according to stuff coming over the wires right now. The consensus was the Paulson – whose hedge fund scored incredible returns shorting subprime last year – had closed out his positions, or was doing so.
Paulson reckons the total financial sector losses alone will top $1300bn – topping the IMF’s $1000bn bearish mark. More in today’s Markets Live.