Les obligations de Citigroup et Merrill plus risquées /Moody's

NEW YORK, 2 novembre (Reuters) - Le risque de détenir des obligations de Citigroup < CITIGROUP INC > ou Merrill Lynch < MERRILL LYNCH & CO INC > a augmenté pour atteindre son plus haut niveau depuis au moins un an, lit-on dans une note de Moody's publiée vendredi.

Les CDS ("credit defaults swaps") de Merrill Lynch, qui mesurent le coût d'assurer la dette d'un groupe contre un risque de défaut, se négocient désormais comme s'ils évoluaient dans la catégorie spéculative ("junk"), affirme David Munves, stratège crédit au sein de l'agence de notation américaine.

Citigroup, Merrill bonds suggest lower ratings-Moody's

NEW YORK, Nov 2 (Reuters) - The risk of owning credit and bonds of Citigroup Inc (C.N: Quote, Profile, Research) and Merrill Lynch (MER.N: Quote, Profile, Research) rose to the highest in at least a year on Friday and Merrill credit default swaps are trading like junk, Moody's Investors Service said.

The spreads, or the yield premium investors demand to hold Citigroup and Merrill bonds over U.S. Treasuries, widened on Friday after Deutsche Bank said most of the more than $10 billion in write-downs expected in the fourth quarter will come from Citigroup and Merrill.

Merrill credit default swaps have a market implied rating of "Ba1," or six levels below its current Moody's rating at "A1," the fifth-highest rating, said David Munves, a managing director and head of Moody's credit strategy group.

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Spreads on Citigroup's 10-year notes widened by 14 basis points to 148 basis points, according to data from MarketAxess. Spreads had widened sharply on Thursday after Credit Suisse and CIBC World Markets downgraded Citigroup.

Citigroup currently has a "AA" rating at Moody's and Standard & Poor's, the third-highest rating, and a "AA-plus" rating at Fitch Ratings, the second-best grade.

This whole crisis is making a joke of all these ratings, showing them as meaningless and totally failing in their predictive role.

As I've said before, this has been a crisis of risk analysis - bankers failing to do their job and relying instead on outsourced manufactured risk analysis - which they were paying for. Part of it is the fascination for simple numbers (or letters on a scale, in that case) giving an impression of a clean underlying risk situation. Part of it is laziness. part of it is greed, as stating a rating allows you to make more deals than if you have to explain the risks to your management. Everybody knows ratings are a safe way of assessing risk.

Sigh...

In the long run, we're all dead. John Maynard Keynes