RE: RE: Dropped further. Sadly I have to agree with you bychoice, the hit on the financial sector is much harder then I was betting on.
Many funds that hold only Canadian financials have dropped in sympathy with their American peers.
Below is an article from this weekends Financial Post.
By Dakin Campbell andHugh Son
Bank of America Corp., Goldman Sachs GroupInc. and Citigroup Inc. had long-term credit grades reduced to A- from A byStandard & Poor’s after the ratings firm revised criteria for dozens of thelargest global lenders.
Standard & Poor’s made the same cut toMorgan Stanley and Bank of America’s Merrill Lynch unit. JPMorgan Chase &Co. was reduced one level to A from A+. S&P upgraded Bank of China Ltd. andChina Construction Bank Corp. to A from A- and maintained the A rating onIndustrial and Commercial Bank of China Ltd., giving all three lenders highergrades than most big U.S. banks.
The moves may increase pressure on firmsbracing for Europe’s mounting sovereign debt crisis andnavigating economic weakness. Bank of America, which has plunged 62 percentthis year in New York trading, said in a regulatory filing this month that itmay have to post billions of dollars of additional collateral and terminationpayments on its trades if it were to be downgraded one level by rating companies.
“It’s evident that stress from the Europeanbanking system is taking its worldwide toll,” Guy LeBas, chief fixed-incomestrategist at Janney Montgomery Scott LLC in Philadelphia, said in an e-mail.
S&P, a unit of New York-based McGraw-HillCos., has been changing the way it looks at debt after its faulty gradescontributed to the credit-market seizure that brought down Lehman BrothersHoldings Inc. and Bear Stearns Cos. It started to review the methodology inDecember 2008, months after the collapse of those two firms.
Downgrades “could likely have a materialadverse effect on our liquidity, potential loss of access to credit markets,the related cost of funds, our businesses and on certain trading revenues,particularly in those businesses where counterparty creditworthiness iscritical,” Charlotte, North Carolina-based Bank of America said in this month’sfiling.
The company, which noted the risk ofdowngrades from S&P and Fitch Ratings in its third-quarter filing,previously said it has prepared by lining up funding for a year.
The following table shows firms that weredowngraded by S&P, followed by a list of banks that were upgraded.
Downgraded:
•Banco Bilbao Vizcaya Argentaria S.A.
•Bank of America Corp.
•Bank of New York Mellon Corp.
•Barclays Plc
•Citigroup Inc.
•Rabobank Nederland
•Goldman Sachs Group Inc.
•HSBC Holdings Plc
•JPMorgan Chase & Co.
•Lloyds Banking Group Plc
•Morgan Stanley
•Royal Bank of Scotland Plc
•UBS AG
•Wells Fargo & Co.
Upgraded:
•Bank of China Ltd.
•China Construction Bank Corp.