MORE ON THE GOP'S ECONOMY

This is what the believers in the Free Market Fairy don't think about - WHEN THE FAIRY FAILS!

Citi, Merrill, JPMorgan face larger writeoffs: Goldman
Thu Dec 27, 2007 1:48pm EST
By Jonathan Stempel

NEW YORK (Reuters) - Citigroup Inc (C.N: Quote, Profile, Research) may need to slash its dividend 40 percent to preserve capital, and with Merrill Lynch & Co (MER.N: Quote, Profile, Research) and JPMorgan Chase & Co (JPM.N: Quote, Profile, Research) may write off $33.6 billion of debt this quarter as the global credit crunch deepens, a Goldman Sachs & Co analyst said.

"It will be a couple of quarters before the current credit crisis is fully digested by the markets," the analyst, William Tanona, wrote in a report released on Thursday.

Some will say, don't worry, these losses were insured AND THEY WOULD BE WRONG!

ACA Gives Control to Regulator to Avert Bankruptcy (Update6)
By Cecile Gutscher and Christine Richard

Dec. 27 (Bloomberg) -- ACA Capital Holdings Inc., the bond insurer that lost its investment-grade credit rating last week, agreed to give control to regulators to avert bankruptcy.

S&P sliced ACA's rating 12 levels to CCC, casting doubt on more than $75 billion of debt the company guarantees, including $69 billion of securities such as collateralized debt obligations.

Credit rating companies are reviewing MBIA Inc., Ambac Financial Group Inc. and other bond insurers on concern they don't have enough money to cover potential losses stemming from accelerating downgrades of the debt they guarantee, potentially endangering $2.4 trillion of securities.