A LITTLE TOO LATE

A Standard & Poor's economist sees the truth years too late to do any good:

Financial reports show 5 biggest banks face huge loss risk
By Greg Gordon and Kevin G. Hall
McClatchy Newspapers
Posted on Monday, March 9, 2009

The biggest concerns are the banks' holdings of contracts known as credit-default swaps, which can provide insurance against defaults on loans such as subprime mortgages or guarantee actual payments for borrowers who walk away from their debts.

Trading in credit-default contracts has sparked investor fears because they are bought and sold in a murky, private market that is largely out of the reach of federal regulators. No one, except those holding the instruments, knows who owes what to whom. Not even banks and insurers can accurately calculate their risks.

"I don't trust any numbers on them," said David Wyss, the chief economist for the New York credit-rating agency Standard & Poor's.