Thursday, March 12, 2009

Berkshire Unsecured Rating Cut By Fitch To AA, Outlook Negative

Following in the footsteps of GE's downgrade earlier, the AAA rated financials are now extinct.

The Fitch downgrade is presented in its entirety, however one important thing to note is Fitch's disclosure that it had evaluated non-public information regarding BRK's derivatives exposure. Being the first to downgrade the company upon seeing this disclosure likely portends nothing too good from the other rating agencies which are behind the curve.

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Anonymous said...

amazing. i wonder if this is why uncle warren has been doing the media rounds recently to try and headoff something like this. will be interesting to see what MCO does....

Anonymous said...


funny how some people (this blog) uphold the opinion of the credit agencies when it fits their agenda. yet for all other intents and purposes, the ratings agencies are completely and utterly incompetent.

Tyler said...

Ha, we make fun of rating agencies without reservations. We present it because, as you may or may not know, 80% of asset managers (make you wonder why thay are called managers and not RA puppers) have strict limits on holding or selling positions based merely on RA ratings. CLOs have position limits on whether they can hold bonds/loans based on prices. It is in this world (the real one unforunately) that rating agencies opinions matter. RAs are hopelessly behind the curve... however their opinion is still phenomenally critical, mostly a function of a broken legacy system.