Fitch

Since by now it is all too clear that none of the rating agencies will dare to downgrade the US until well after its creditors realize they have all been taken for the proverbial ride, and even longer after the Fed owns a vast majority of US treasury bonds, which according to CNBC is great, but according to Weimar Germany is sucky to quite sucky, one is forced to pay attention to the fine print and carefully worded nuances in all public statements to see just how they really feel. Today provided just such an opportunity. According to Market News, "Fitch Ratings Wednesday said it believes “the U.S. fiscal metrics will be the worst of any ‘AAA’-rated sovereign,” due to the higher-than-expected deficits and debt levels expected following the extension of the Bush era tax cuts." That's about as diplomatic as it gets without getting (nearly) fired for telling the truth (see NJ governor Christie). The punchline: "Absent a credible plan, the rating on the U.S. federal government will come under pressure." Too bad the US has not had a credible plan for about 30 years now aside from "...print?"

As America continues to keep its head firmly planted in the sand, if not somewhere much worse, Europe is falling apart. Hungary was just downgraded by Fitch to BBB-, and still kept its rating outlook negative, meaning the country is about to enter junk territory. And what is sure not helping is the record strength of the CHF, which is making life for borrowers in Hungary a living hell, whose debt is denominated primarily in Swiss Francs. And as US stocks hit 2010 highs, so does the SovX index of sovereign spreads. In other words, equities and sovereign bankruptcy risk are now positively correlated with an R2 that would make 1.000 almost blush.

What's that you say Bank of America and JPM, "it's all contained?" Hey Fed, it's not too late to add $8 trillion in MBS to QE2. On the other hand, now we know what QE3 will be buying. "Fitch Ratings has assigned a Negative Outlook for the entire U.S. Residential Mortgage Servicer ratings sector on increased concerns surrounding alleged procedural defects in the judicial foreclosure process. This industry-wide issue will cause all servicers to be under increased scrutiny from a wide range of state and federal regulators, state attorneys general, and GSEs. All servicers will be affected, even those fully in compliance with all foreclosure rules and regulations."

Here is an example of how the blogosphere is destructive to the cataclysm that is the US economy: we present the truth. To wit: Fitch Ratings has placed the 'F1+sf' ratings on three Bank of America N.A.-sponsored ABCP conduits on Rating Watch Negative. Next up: all of BofA's MBS conduits to be downgraded on complete legalese  vacuum on pervasive fraud.

Here we go - the rating agencies are now officially in the game. Next up - collateral calls and other nasty stuff: "Today, Fitch Ratings issued a number of separate press releases placing on Rating Watch Negative most U.S. bank and bank holding companies' Support Ratings, Support Floors and other ratings that are sovereign-support dependent. The two companies mostly impacted by this announcement are Bank of America Corporation and Citigroup, Inc." BBB+ coming up.

After much posturing, Fitch has finally downgraded Ireland from AA- to A+, with a negative outlook. Net result: bund spread blows out to 415, up 5bps on the day, and will likely continue blowing out. We expect the FinMin to hold another conference call with Citi to reassure everyone how nothing is fucked here, which this time will be recorded by everyone in anticipation of another "mute button malfunction." Elsewhere Irish consumer confidence has plunged from 61.4 to 52.4. The two are speculated to be related.

Minutes ago RealtyTrac has released its Q2 summary snapshot. In summary, Q2 saw 248,534 properties in some stage of foreclosure (default, scheduled for auction or bank-owned) sold to third parties. This represented a 5% increased from Q1, and a 20% decline from Q2 of 2009. The average sales price of a foreclosure property was 26% below the average sales prices of regularly sold homes. “While foreclosure sales increased in the second quarter, non-foreclosure sales increased even more, spurred on by the homebuyer tax credit that expired during the quarter,” said James J. Saccacio, chief executive officer of RealtyTrac. “That had the net effect of lowering foreclosure sales as a percentage of total sales during the quarter, but that may be a temporary dip as the removal of the tax credit could drive more buyers back to discounted short sales and REOs.” Ah, but herein lies the rub: with pretty much everyone now halting evictions, and foreclosure themselves, all those who are looking for foreclosure bargains will be very, very disappointed. Because while the actual market is digesting the implications of what the recently announced JPMorgan moratorium on foreclosures means (very bad things), Fitch has already fired the first shot and announced it would downgrade mortgage companies engaging in foreclosure fraud. Well, that means preeeetttty much all of them. And the most troubling implication: all those who bought foreclosed properties may soon be facing a transaction unwind, once it becomes clear that there isn't a clear title owner.

More imminent concerns of counterparty collateral calls: BP Plc’s long-term issuer default rating snd senior unsecured rating were cut to BBB from AA at Fitch Ratings. The rating watch was changed to Evolving from Negative. BP is now just barely investment grade to Fitch, the rating agency that has the highest Greek rating.

Value added from the rating agencies. We have to still see a CDS run on the name post the news, but it won't be tighter.

CDOs guaranteed by Spain? These must be underwritten by Goldman Sachs.

Fitch Ratings has today downgraded 10 classes of CDO notes and affirmed 14 classes of CDO notes following the agency's downgrade of Spain's Long-term foreign and local currency Issuer Default Ratings (IDR) to 'AA+' from 'AAA'."The sovereign downgrade reflects Fitch's assessment that the process of adjustment to a lower level of private sector and external indebtedness will materially reduce the rate of growth of the Spanish economy over the medium-term."

And so it begins. But the Bank of Spain said all is fine..."Despite government debt and associated interest costs remaining within the AAA range, Fitch anticipates that the economic adjustment process will be more difficult and prolonged than for other economies with AAA rated sovereign governments, which is why the agency has downgraded Spain's rating to AA+."

The Rating Outlook revision to Negative incorporates recent legal developments and ongoing regulatory challenges that could adversely impact Goldman's reputation and revenue generating capacity. Goldman's franchise and market position are potentially vulnerable to scrutiny by stakeholders, and like peers, may be affected by the industry's regulatory evolution.

The Fitch full court press on Greece continues, now downgrading the Covered Bonds of the National Bank Of Greece from AA to A+, as well as those of Alpha and Marfin Egnatia Bank. Moody's is still evaluating whether the best time to come out with its AAAAA++*** upgrade is just before Buffett sells his entire stake, or just after. In themeantime, the Greek depositor bank run is certainly [not] getting much better. You decide.

Observe the exponential volume spike at 10:30 when news of the Fitch downgrade hit. And, as always happens, there was smoke coming out of the windows of Liberty 33 following the much necessary stick save. And after that, as volume plunged, the algos took over. Because as everyone knows, If Volume Crap Then Buy, Buy, Buy. At this point if you are in this market, you are on your own and soon to go broke.

Total. Soap. Opera. Rumors of a Moody's Upgrade to AAAAA+++ vastly exaggerated

Fitch Ratings-London-09 April 2010: Fitch Ratings has today downgraded Greece's Long-term foreign and local currency Issuer Default Ratings to 'BBB-' from 'BBB+'. The Outlook is Negative. The agency has simultaneously affirmed Greece's Country Ceiling at 'AAA' and the Short-term foreign currency IDR at 'F2'.