Rob Haines, an analyst at CreditSights, said Tuesday that AIG needs to move quickly.
Credit researcher CreditSights has a "takeout ten" list of companies it expects will be bought.
"Their balance sheet can take a shock much better than Countrywide, " said CreditSights senior analyst David Hendler.
Morgan Stanley and JPMorgan are hiring brokers for their private client divisions, for example, notes CreditSights analyst David Hendler.
David Hendler, an analyst at CreditSights, says the investment will at least forestall a ratings agency downgrade of WaMu.
Lehman's debt would also have to be split among the good and bad banks, says CreditSights Analyst David Hendler.
As a result, provisions have become more pro-cyclical, says CreditSights, rising more sharply from low levels when markets turn.
"When GM feels the pain, the industry will back off incentives, " says Glenn Reynolds of the credit analysis firm CreditSights.
Analyst David Hendler of CreditSights says Citi still needs to upgrade systems that date from that period, but somehow never got any attention.
CreditSights, a debt and equity analysis firm, says overcapacity in the printing industry keeps 36% off the presses and printing plans idle.
Still, Louise Purtle of CreditSights said the rushing of bond issuance could be an example of "panicky policy" leading to "unintended" consequences.
"We still believe the company's leading platforms for both mortgage servicing and origination represent an attractive takeover play, " says CreditSights' David Hendler.
"It's going to add to the funding pressure on these banks, " said Simon Adamson, a banking analyst with research firm CreditSights Ltd.
CreditSights reckons that it has created a headwind for American banks that is equivalent to some 15-25% of estimated earnings per share.
"The lease residual-value risk in general remains Ford Motor Credit's biggest asset-quality wild card, " says Glenn Reynolds of the credit analysis firm CreditSights.
And that problem, says Christian Stracke, a strategist at CreditSights, is made doubly, well, problematic because rich countries have current-account deficits to finance too.
However, following the announcement Thursday of a multi-billion dollar settlement over mortgage servicing, CDS widened (showing perceived greater default risk) by 0.14-0.34%, according to CreditSights.
And banks themselves are exposed: paper issued by the mortgage agencies accounts for roughly half of their total securities portfolios, estimates CreditSights, a research firm.
"Ambac's ability to raise sufficient capital to avoid a downgrade is now in significant doubt, " said CreditSights analyst Rob Haines in a research note Thursday.
GM's case, they have gone from 2.3% of revenues in 1999 to 5% this year, according to a study by CreditSights, an independent research firm.
Bear Stearns has the most exposure to the beleaguered subprime mortgage sector according to those criteria, said CreditSights analyst David Hendler in a research note Monday.
"We sense that the supervisory authorities want this negative capital markets noise from Lehman Brothers to be dialed down, " said David Hendler, an analyst at CreditSights.
CreditSights' Hendler envisions a sale of WaMu as the most likely outcome for the private equity investors, who will inevitably want to cash out their investment.
"We continue to believe the monoline problem will ultimately require a broader multifaceted regulatory response, " said CreditSights analyst Rob Haines in a note earlier this week.
"For GM, the scary ride is just beginning, and much has to still go right, " said Glenn Reynolds, a capital structure analyst at CreditSights, in a report.
If mortgage losses go beyond already gloomy predictions, "they could succumb to more capital pressure, and their independent-company days may be numbered, " says David Hendler, an analyst at CreditSights.
Analysts at CreditSights, a research firm, think the picture will keep getting worse until late this year, though they do not expect credit-card and car-loan defaults to break records.
In fact, according to CreditSights, credit default swaps (CDS) which measure the risk of default actually tightened (showing the market sees reduced default risk) 15-50 basis points, or from 0.15-0.50%.
CreditSights, a rating agency, says that the European implied default rate, assuming a 20% recovery rate, reached 25% at the end of last year but has since fallen to 15%.
In the company's 1998 annual report, as Glenn Reynolds of the bond analyst firm CreditSights points out, it predicted that the growth of its health care costs would flatten at 5% by 2004.
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