This is just a step en route to nationalization. We are seeing a spiral down that will mean the U.S. Government will eventually step in. These organizations will fail without government support and they are too big to fail.
The senior and subordinated debt ratings were affirmed, according to a statement today by the New York-based ratings company. The financial strength ratings for each company were cut to B-, while the preferred stock ratings were lowered to A1 from Aa3. Both remain under review for further downgrades.
Every day that the Bush Administration dithers regarding a definitive solution is another day that weakens the strength of U.S. banks and sows the seed of doubt regarding the U.S. dollar. Not only are bank shares down again, but the Euro is at an all-time high versus the dollar and gold is closing in on $1000/ounce.