Research Zeitgeist: PMI, Monolines and Chemicals
While the federal government wargames potential scenarios for propping up Fannie and Freddie, ripple effects from the housing crisis continue to spread. Default trends among private mortgage insurers, based on a new report from CreditSights, raised alarms in our most widely read post of the past week, with Radian Guaranty seemingly most at risk.
Meanwhile, Moody’s published a useful guide to interpreting mark-to-market losses of the monoline insurers. The ratings firm noted that “while mark-to-market losses may not represent a true indicator of credit deterioration, neither are they merely accounting noise, particularly in the current environment”.
More evidence of the spread of housing related gloom came in a report from Fitch that US title insurers’ capital ratios are at their lowest level since Fitch began monitoring them 10 years ago.
In making its bid for specialty chemicals maker Rohm & Haas, one hopes the Dow Chemical team first read Moody’s Negative Outlook for US Chemicals Companies. The report, which notes Dow’s interest in building their specialty chemicals business, detailed that many such companies, including Rohm & Haas, had large exposure to increased feedstock and energy costs.
Perhaps as a distraction to all the negative news in the market, the Forrester report, How Video Will Take Over The World, remained among the top posts for the third week running.
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