Moody's: Jumbo-MBS under Review for Downgrades

where was Moody's back in 2005? Why didn;'t they downgrade any subprime mortages back then?

moody's was busy determining that prices in alpine were too high.

Oh, very good, aboutready contributing nothing but making fun of others.

But when she makes fun of others and offers no substance, it's ok.

Moodys is merely opining what the industry already knows. These pools have been deteriorating for some time.

I believe Moody's criteria for determining is as follows. They look at the market price of a bond. If it is yielding what it's supposed to, then all is fine. If it drops to 70 cents on the dollar, they figure the market must know something so they set themselves up to get an alert and issue a "review for downgrade". If the price is still in the toilet after a couple of weeks, they downgrade figuring the market still knows what it new. If the price is lower, they declare it in immediate danger of default figuring the market must really know something.

Now if there was only a way to make money from predicting Moody's downgrades...

Ratings are irrelevant. If the bond has deteriorated the price is already down. Only matters for things like risk based capital or whether a firm's guidelines allow it to hold a bond of a certain rating.