It seems likely that losses from monoline exposure could impact second quarter earnings by nearly $10 billion, nearly doubly the previous loss amount. The hardest hit among financial companies will likely be Citigroup (NYSE: C), Merrill Lynch (NYSE: MER), and UBS (NYSE: UBS). Such is the latest from Meredith Whitney from Oppenheimer. It is likely that Citigroup will post another loss, perhaps has high as $.50 per share, compared to previously expected quarter in the black.
Finally. Standard & Poor’s downgraded monoline bond insurers MBIA (NYSE: MBI) and Ambac (NYSE: ABK) to AA from AAA on June 5. This seemingly went over as a nonevent on Wall St. yesterday and one has to wonder - Moody’s (NYSE: MCO) what are you waiting for now? The credibility of these ratings agencies is all be kaput. This will affect around $1 trillion in bonds.
Dealbreaker has an interesting post today regarding bond insurance and how average retail investors, who own most of the municipal bonds out there, may be prone to thinking that this insurance means more than it actually does.