Moody’s awarded incorrect triple-A ratings to billions of dollars worth of a type of complex debt product due to a bug in its computer models, a Financial Times investigation has discovered.
Internal Moody’s documents seen by the FT show that some senior staff within the credit agency knew early in 2007 that products rated the previous year had received top-notch triple A ratings and that, after a computer coding error was corrected, their ratings should have been up to four notches lower.
News of the coding error comes as ratings agencies are under pressure from regulators and governments, who see failings in the rating of complex structured debt as an integral part of the financial crisis. While coding errors do occur there is no record of one being so significant.
Moody’s said it was “conducting a thorough review” of the rating of the constant proportion debt obligations – derivative instruments conceived at the height of the credit bubble that appeared to promise investors very high returns with little risk. Moody’s is also reviewing what disclosure of the error was made.
May 2008 Archives
The designs have become better but also users have become accustomed to that interactive environment," Dr Nielsen told BBC News.I had an opportunity to chat with a couple of recent homebuyers, one a 26 year old married expectant mother, the other a Fortune 500 relocating family with elementary age children. Their comments include:
Now, when people go online they know what they want and how to do it, he said.
This makes them very resistant to highlighted promotions or other editorial choices that try to distract them.
"Web users have always been ruthless and now are even more so," said Dr Nielsen.
"People want sites to get to the point, they have very little patience," he said.
- They gravitated to websites that featured quality, large still and vr images
- Search by map was very important, particularly when searching for homes in specific school districts.
- Both browsed every relevant real estate site they could find, in an effort to not miss an opportunity (interesting, and reflects the industry's inability to get the message out about data sharing).
hat might seem like a strange statement from someone who spends a lot of time writing online and until recently answering questions in some social networks.
What my experience has taught me is that you can provide a lot of information to people. It certainly helps to get them interested in an area, but it rarely goes beyond that.
Being interested and actually doing something like moving to an area are two totally different things.
Where my posts on social networks have been most effective are with newcomers who have already moved and are looking for area information and having a hard time finding it.
Part of the challenge with social networks is the people running the networks. They are so convinced that their networks hold the only key to business success that they police them like some homeowners associations who have nothing better to do than making sure someone's tomato plants don't stick out beyond the side of their house. Don't laugh I actually saw that happen in Columbia, MD.
Standard & Poor's Ratings Services said its 'B' rating and negative outlook for United States-headquartered property company Realogy Corp. would not be immediately affected despite expectations that its senior secured credit facility leverage covenant cushion will narrow in the June 2008 quarter because S&P believes Realogy will produce positive cash flow generation in the second half of 2008 and significantly reduce its revolver borrowings.Realogy's first quarter, 2008 results.
S&P said though, it is concerned that if the United States residential real estate market does not recover before early 2009, Realogy may face EBITDA declines that exceed the low-teens percentage-wise and face a reduced cushion in its senior secured leverage covenant.
What the survey never asked: If I'd recommend the company, and what I'd say if I did (or how I would recommend against them). This national company, known for its transportation solutions, squandered a free opportunity to understand word of mouth.Main Street's sophisticated contact management and weblead tools collect online survey data (transaction, showing, CMA, homefinder, relocation, recruiting, mortgage, concierge) and may apply followup rules.
Which leads us to what a good survey does to gather valuable customer feedback:
Its first question is: "Based on your recent experience with us, would you recommend us to your friends, family, colleagues, etc.?" Yes, no, or I don't know are the possible answers. (You could use the Net Promotoer methodology here, too.)
For example, based on the survey results, additional information can be sent to the customer (email, text or pdf/print) and internal followup campaigns can be launched at the agent/team, staff or manager level.
Finally, all of this information is stored in one place, your contacts (along with all of your other client activities).
Realogy Corporation, a global provider of real estate and relocation services, today reported results for the first quarter 2008. Specifically, first quarter 2008 net revenue totaled $1.05 billion; EBITDA was $4 million, modestly above the Company’s earlier guidance; and net loss was $132 million, due mainly to interest expense of $164 million.10-Q @ sec.gov.
“The first quarter of any year is historically our slowest from an earnings perspective almost entirely due to the seasonality of the residential real estate market,” said Richard A. Smith, Realogy’s president and CEO. “We still have most of our annual EBITDA opportunity in front of us and, of course, that’s where our focus lies.”
Smith continued, “Realogy’s first quarter 2008 operating results reflected the continued industry-wide slowdown in U.S. existing home sales but were partially offset by management’s focus on overhead, productivity and growth. In April, we saw some early indications that the improving year-over-year unit change trends being forecasted by the National Association of Realtors and Fannie Mae in the back half of 2008 may be starting to develop. While we expect to see some mixed results in the coming months, we are encouraged by these positive signs of activity in April.”
The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now.
How can this be? For starters, a bottom does not mean that prices are about to return to the heady days of 2005. That probably won't happen for another 15 years. It just means that the trend is no longer getting worse, which is the critical factor.
Most people forget that the current housing bust is nearly three years old. Home sales peaked in July 2005. New home sales are down a staggering 63% from peak levels of 1.4 million. Housing starts have fallen more than 50% and, adjusted for population growth, are back to the trough levels of 1982.
Furthermore, residential construction is close to 15-year lows at 3.8% of GDP; by the fourth quarter of this year, it will probably hit the lowest level ever. So what's going to stop the housing decline? Very simply, the same thing that caused the bust: affordability.
"You are exceptional. Worldly. Refined. You live life according to your definition. Uncompromising. . . . Finally, a building that captures your spirit and sophistication . . . "
If you read the above advertisement, for a condominium in Atlanta called CityPlace Buckhead, and thought that no reasonably educated person could be persuaded by such flattery to sign over a small fortune for a place to live, think again. Jorge Pérez, the chief executive of the Related Group and one of the country's foremost housing developers, has appeared on the Forbes 400 list of richest Americans for the past several years, thanks in part to just such blandishments.
Mr. Pérez's "Powerhouse Principles: The Billionaire Blueprint for Real Estate Success" reveals some of his other selling techniques. Mail invitations only to select buyers, for instance, so that they feel like part of an elite crowd. Tease them with information but refuse to let them buy a property until an appointed time. Make them wait outside a tent in the Florida sun for the opportunity to hear the sales pitch being offered inside.